Huge rise in business rates could force York traders to throw in the towel (From York Press)

Huge rise in business rates could force York traders to throw in the towel

10:02am Wednesday 10th March 2010

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PUBS and shops in York say they could close due to massive hikes in business rates, The Press can reveal today.

Business leaders have claimed large increases – in one case a staggering 200 per cent – are unjustified, and warned they could lead to the closure of more pubs, shops and other outlets.

York MP Hugh Bayley now plans to raise the issue with the Government after discovering proposed rises were a “widespread and serious” problem.

Pubs are facing some of the worst increases in rateable values, with the Castle Howard Ox, in The Groves, facing a rise from £8,700 to £29,650.

The pub’s landlady, Paula Allen, said this could leave her having to pay £12,000 a year in business rates in future, compared with less than £4,000 at the moment.

“It’s the last thing I need after beer duty rises and the costs of providing outdoor smoking areas,” Paula said.

“I have no idea why the increase is so high. Everyone is struggling already.

“We might not survive if we can’t get this increase reduced,” she said.

Businesses in East Yorkshire, including the Plough Inn at Allerthorpe near Pocklington, said their rateable values had also risen.

Nick Brown, managing director of Browns department store in York, said it was facing a “substantial” rise in its rateable value and claimed the overall increases were outdated, having been based on sky-high rental values reached at the height of the boom before the recession.

He said York had experienced bigger increases in rental values than many other parts of the country, and was therefore now being hit by bigger increases in rateable values.

He claimed a backlog of appeals against rateable values would build up which could take two years to clear, during which time businesses would have to pay the higher rate and smaller ones might not survive.

He called for the Government to adopt a “common sense approach” and reduce new rateable values by a blanket amount, for example 20 per cent.

Adam Sinclair, chairman of York Business Forum, said the city had survived the recession better than many, but said rises in business rates, on top of national insurance increases, would make it very difficult for businesses.

He said a number of members had complained to him about rises in their rateable values.

York MP Hugh Bayley said he had been approached by a local filling station facing a very large increase, and he had then contacted a number of other businesses and discovered such increases were a widespread and serious problem. He did not believe businesses coming out of recession should be faced by such rises and was taking the matter up with the Government.

Susie Cawood, head of York and North Yorkshire Chamber of Commerce, said: “Now is not the time to be raising business rates, when we are coming out of recession. It’s not what businesses need at the present.”

‘60 per cent will see reduction in bills’

CHANGES in rateable values have been strongly defended by the Valuation Office Agency, which has set the new figures.

A spokeswoman said today that the revaluation had been designed to “maintain fairness” by ensuring rateable values reflected changes in the rental market since they were last set five years ago.

She also claimed an increase in rateable value did not necessarily mean an increase in the final bill, as people would only pay 41 pence in the pound of their rateable value in future compared with 48 pence now.

She said businesses should contact the agency first if they believed their rateable value was wrong, rather than going straight to appeal, saying many complaints could be resolved without having to go through the formal appeal process.

“We urge businesses to check the details of their new valuation in the letters we have sent and on our website,” she said.

“If they think something is wrong with the valuation, they should contact us so we can look into it.”

She said it was estimated that about 60 per cent of all properties across England and Wales would see a reduction in their rates bill this coming year. For those facing increases, the Government was introducing a £2 billion transitional relief scheme which would phase in changes in bills over five years, and would continue to offer small business rate relief.

Massive increases could ‘lead to degeneration’

TRADERS in historic Micklegate are planning to band together to fight huge increases in their rateable values.

They claim that if the hefty hikes are not reversed, more shops and bars will close and the historic street will suffer “degeneration instead of regeneration”.

They are asking for the support of local councillors and York MP Hugh Bayley as they prepare to launch a concerted appeal to the Valuation Office Agency.

The Archdeacon of York, the Rev Richard Seed, who recently attended a packed crisis meeting about rates in his capacity as vicar of Holy Trinity Church in Micklegate, said there was deep concern and another meeting would be held at the church on March 25.

“People believe such rises could lead to degeneration instead of the regeneration that the street needs,” he said.

Ray Neal, of Sunshine, a tanning salon in Micklegate, warns in a letter to The Press today: “The proposed increases will ultimately put another wave of small shopkeepers out of business… Surely reasonable rates that people can pay are better than punitive ones that destroy businesses.”

A spokesman for Rumours bar said its rateable value had soared from about £15,000 to £30,000.

He said: “Small businesses are already struggling without this,” he said.

Pete Pendlebury, landlord of the Windmill, in nearby Blossom Street, said his rateable value was initially raised by more than 50 per cent from £57,000 to £86,000.

After discussions with the Valuation Office agency, which determines the rateable values of business properties, the new figure had been reduced to £72,000, but this was still a hefty increase which came as a massive blow on top of other extra costs he was facing.

“I will have to increase turnover by £15,000 or lose staff to pay this,” he said.

Relentless hikes eat into butcher’s profits

A SELBY businessman said he has received a rates bill for thousands of pounds more than he expected.

Philip Morley, of Morley’s Fine Foods butchers shop in Market Cross, said he had received a bill for £4,000 more than last year.

Mr Morley said: “We were being charged about £11,500 and they are looking at putting it up to £15,500 a year.

“Over the past few years the bills have leapt dramatically. We’re probably paying double now to what we were paying five years ago.”

Mr Morley said it was not only the rates that were going up – having his rubbish collected now costs him £2,000 a year while gas and electricity prices had also risen, plus the business still had rent to pay to the building’s owner.

Although not putting the business in danger of folding, Mr Morley said constant increases could not keep being taken out of the profits.

He said: “We employ quite a few people and you have to look at where you’re going to save the money. You can’t stand these charges all the time – you can’t keep taking it out of the profits.”

Campaign supports business community

THE row over soaring business rates comes exactly a year after The Press launched its York Means Business campaign.

The campaign aims to promote and support the region’s economy during the recession.

The campaign has included the creation of a film aimed at attracting investment and jobs to York, a Shop Local poster blitz and a Shop Of The Year contest, aimed at recognising the best retailer in the region.

Susie Cawood, head of York and North Yorkshire Chamber of Commerce, said today that the overall picture on the economy was much more positive than it had been last March.

“The business community very much appreciates the way The Press has supported it, and continues to support it, through this campaign,” she said.

The campaign was also praised by Adam Sinclair, chairman of York Business Forum, who said it had been effective.

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