Time to give businesses a better deal on the rates

Martin Schneider, the owner of Accent Clothing, Queens Arcade, Leeds. PIC: Graham Lindley
Martin Schneider, the owner of Accent Clothing, Queens Arcade, Leeds. PIC: Graham Lindley
0
Have your say

THE YEP today launches a save our high street campaign that is calling on the government to overhaul the uk’s crippling SYSTEM OF business rates. Paul Robinson reports.

MARTIN Schneider’s Accent Clothing store has been part of Leeds’s retail landscape since he was, as he says himself, just a “lad with a dream”.

He has had a proud presence in the Queens Arcade in the city centre since 1984, with labels such as Liberto, Replay and Diesel among the first designer names sitting on his shelves.

Today his store is a go-to destination for the sharpest dressers in Leeds, making Martin – in theory, at least – an example for aspiring entrepreneurs across the city to follow.

However, he says the would-be wheelers and dealers of the 21st century are finding it almost impossible to start out in the same way he did - and one of the main reasons they are running into a brick wall is the burden of business rates.

The Accent boss spends an eye-watering £50,000 each year on the rates for his store – an outlay he says brings him little benefit other than getting his bins emptied.

And today he and other traders in Leeds threw their weight behind the Yorkshire Evening Post’s call for the country to make a fresh start on business rates as part of our Shop Local, Eat Local, Play Local initiative.

Martin told the YEP: “The system is a joke – we get no value for money whatsoever. Independents like Accent have it particularly tough compared to the big names, and that worries me.

“The independents are a major part of the city’s success. People come from places like Newcastle and other cities to visit our arcades and shop in stores they don’t find anywhere else. Why will they come if and when we decide we can’t afford to be here any more? I could never do now what I did back then, starting out in the 1980s. No one could – the money just isn’t there, unless you’re lucky enough to have it in the family.”

Located next to Kirkgate Market and the work-in-progress Victoria Gate development, The Fisherman’s Wife has been trading on George Street as a fish and chip shop for 50 years.

Manager Graham Stephenson says his experiences highlight the need for more flexibility in the system. The closure in April of a Leeds City Council-owned car park ahead of the start of construction on Victoria Gate saw the unit’s trade tumble by 20 per cent. “Situations like that should be taken into account when working out business rates,” said Graham.

Graham is also manager of another Fisherman’s Wife in Headingley, until recently known as Bryan’s. The business rates for the site cost him £20,000 per year and, like Martin at Accent, he says he does not get much for his money.

Welcoming the YEP’s Save Our High Street campaign, he said: “It is good to see the stance the paper is taking.” Lee Garforth, owner of The Greengrocer on Main Street in Garforth, pays £10,000 each year in business rates. He said: “We have a Co-op on our parade, a Sainsbury’s over the road and a big Tesco at the top of the street. It’s not really a level playing field, even before you start taking business rates into account. We are fortunate in Garforth that Main Street is busy and still doing well. You go to places in other parts of the city, though, and they are struggling. We need healthy local high streets. I’m fully behind the campaign.”

Although business rates are collected by councils, the amount payable is determined by the Government. The country’s traders have the highest property tax bills in Europe. The YEP is urging ministers to overhaul the business ratings system. We have joined forces with hundreds of our sister Johnston Press titles and the British Independent Retailers Association to demand that the rates are also frozen immediately.

Ashley Highfield, CEO of Johnston Press, said: “Supporting communities – and the small businesses within them – is at the heart of what we do. Small businesses are the lifeblood of their communities and this campaign is aimed at helping them to survive in an ever more challenging environment.”

SHOW YOUR SUPPORT FOR CAMPAIGN

The Yorkshire Evening Post is asking you, the readers, to get behind our campaign.

To show your support for our efforts on behalf of Leeds’s high streets, fill in the petition on this page. Names can also be added to the petition online by visting the www.change.org/p/uk-government-launch-an-immediate-review-of-the-business-rates-system-in-england-freezing-rates-in-the-interim web page.

BUSINESS RATES INTRODUCTION

Business rates, or non-domestic rates, collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services. Up until April 2013, the rates were collected by local authorities then paid (or “pooled”) to central government and redistributed to local authorities as part of an annual grant settlement, used in part to pay for local authority services. This has changed from April 2013 with the introduction of a rates retention scheme. 


How business rates are worked out

The local authority works out the business rates bill by multiplying the rateable value of the property by an appropriate multiplier. Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs.

All these rateable values are available at www.voa.gov.uk. The rateable value of a property is shown on the front of the bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date. The VOA may alter the value if circumstances change.

The national non-domestic rating multiplier

There are in fact two multipliers; the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The Government sets the multipliers for each financial year for the whole of England according to formulae set by legislation. This is based on the retail price index change but for 2014-15 the Government capped the increase at 2 per cent instead of 3.2 per cent.

Revaluation

All rateable values are supposed to be reassessed every five years at a general revaluation, although the next one, due in 2015, has been postponed. The current rating list is based on the 2010 revaluation. Regular revaluations are intended to ensure ratepayers pay their fair contribution, by ensuring that the share of the national rates bill paid by any one ratepayer reflects changes over time in the value of their property relative to others. Revaluation is not intended to raise extra money for government.

For those ratepayers who would otherwise have seen significant increases in their rates liability, the government has put in place a transitional relief scheme to limit and phase in changes in rate bills as a result of the 2010 revaluation. To help pay for the limits on the increases in bills, there were also limits on reductions in bills.

The transitional arrangements are applied automatically and are shown on the front of the bill. More information on revaluation 2010 can be found at Valuation Office Agency

There are various circumstances under which an occupant may receive relief on a bill:

- Partly Occupied Property Relief

- Small Business Rate Relief

- Charity and community amateur sports club relief

- Rate Relief for Businesses in Rural Areas

- Discretionary Retail relief

- Discretionary Re-occupation relief

- Local Discounts and Hardship Relief

How to check the rateable value

The council uses the rateable value provided by the VOA to work out the business rates bill. A ratepayer can check a rateable value and compare it with others on the Valuation Office Agency - Valuation Page Contact should be made with the VOA directly if there are any issues.

Autumn Statement 2013

On 5 December 2013, the Chancellor of the Exchequer George Osborne, made his 2013 Autumn Statement in the House of Commons. The statement provides an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility.

As well as some points mentioned above (in respect of SBRR, the multiplier and new discretionary reliefs), the Autumn Statement 2013 announced that;

- Appeals Backlog - 95% of outstanding business rate appeal cases will be resolved by July 2015

- Rateable values - In 2014 a consultation will look at changes to provide greater transparency over how rateable values are assessed, improve confidence in the system and allow well founded challenges to be resolved faster, preventing backlogs building up in future

- Instalment Changes - Legislation will be made to allow business rates bills to be spread over 12 months rather than 10 months as currently, with effect from 1 April 2014

- Administration Reform - A discussion paper to be published in the spring of 2014 on options for longer-term administrative reform of business rates post-2017 which maintains the aggregate tax yield.

This was published on 10 April 2014 and will look at 5 issues:

- Valuation of properties

- How frequently property is valued

- How business rates are set

- How business rates are 
collected

- What and how business rates information is to be used

Dr Tom Dobson, course director at Leeds Beckett University.

#SpeakYourMind: Leeds Beckett launches UK's first mental health degree for school leaders