No one wants to pay the government any more in taxes than they have to. They especially do not want to have to start paying an additional amount after having grown accustomed to paying a lower amount. That is what many in the self storage industry in the UK have been faced with since a value added tax has been added to their industry.
Governments need revenue in order to operate no matter where in the world they are. Sometimes when expenses go up the government has to find ways to raise additional revenue. That typically means more taxes.
Leaders of the self storage industry in the UK tried to fight the tax, but to no avail. Now that it has been implemented for a few months companies are starting to see where it will affect their bottom line (at least in the short term). You would expect that since it is an additional expense that their bottom lines have been hurt because of it, but that is not the case for everyone.
Lok’n Store is a self storage provider with more than 22 self storage facilities and plans for additional ones to come soon. In the months since the value added tax has been mandated by the government industry wide the company has actually seen an increase in revenue.
In the first half of the fiscal year the company saw revenue increase by 2.2 percent and occupancy by 6.1. Of course it helped that Lok ‘n Store was already charging a VAT to consumers so it was nothing new to them when the government started requiring it.
“The harmonization of VAT across the U.K. self-storage sector has benefited Lok’nStore with our major competitors having to register for VAT, while our own business was already VAT-compliant,” said Andrew Jacobs, CEO.
The success that Lok ‘n Store has had has been aided by an increase in rentals of 12.4 percent in comparison to the same time last year; last year it had decreased by .3 percent. The company even expects revenue to increase in the second half of the fiscal year, an expectation that will be aided by the addition of two new facilities.
“Revenue and occupancy growth from our existing stores, combined with the opening of the new Maidenhead store later this year and the Aldershot store in 2014 will provide continued impetus for our sales growth.”
“Lok’n Store robust trading continues.” Sharecast.com; 18 February 2013.
About Lok’n Store; LoknStore.co.uk.