Wednesday, 10 August 2022

Retailers braced for rise in business rates

HENLEY’S traders are bracing themselves for a hike in their business rates on April 1.

The charge, which South Oxfordshire District Council collects on the Government’s behalf, is expected to increase in towns across Britain following a five-yearly review that was conducted in 2015.

It is based on a property’s rateable value, which is roughly half the amount it could be let for. A portion is kept by councils to fund services such as street lighting and cleaning and road repairs.

Although the Government has doubled the cap on rate exemption from a rateable value of £6,000 to £12,000, this is unlikely to help in Henley as most businesses are valued higher than that.

Those valued between £12,000 and £15,000 will be able to claim a portion of their rates back, with higher-valued properties qualifying for a lower figure.

But, according to data from the Valuation Office Agency, businesses now have an average rateable value of £25,000 in Duke Street, £42,380 in Bell Street, £20,800 in Hart Street, £40,387 in New Street, £29,905 in Thames Side, £13,387 in Friday Street and £25,460 in Market Place.

Only a few are valued below £12,000, most of which are offices or smaller units like the Sole Man cobbler in Duke Street.

This means that, for example, a shop in Market Place that was previously rated at £33,750 is now rated at £37,000, an increase of almost 10 per cent, and would pay more than £17,000 a year in rates.

Henley businesses will receive their invoices in the next fortnight.

Laurence Morris, who owns the Laurence menswear shop in Duke Street, said: “I’m definitely expecting that mine will go up. I think it’s an unfair and antiquated system that’s based on square footage rather than profit or turnover, which would make a lot more sense.

“It means hundreds of thousands of businesses that work from home don’t have to pay anything. I’m not sure what we get out of it as we don’t even get our rubbish collected. It should apply to every business and should be a fairer reflection of their ability to pay.

“Let’s say there was a shop similar to mine in an area with lower property values. It could be making a higher turnover but its rates could be lower and that makes no sense. I don’t see why we should be penalised because Henley is seen as an affluent area.

“It deters independent businesses from setting up shop. At least rent is negotiable with the landlord but there’s absolutely no element of freedom with the rates. You can appeal but that takes forever so it’s pretty much a fait accompli. They’re still processing appeals from the last valuation.”

Tim O’Sullivan, who runs the neighbouring No 27 menswear store, said: “The rates are far too high and don’t help the community while few of us benefit from rate relief.

“The town needs to grow but rates have a stifling effect on entrepreneurship. People with good business ideas are penalised because the risks are too high.

“The charge should be more closely linked to your turnover — it might be a bit more complex to administer but wouldn’t be impossible.”

James Miller, who owns Henley Cycles in Reading Road, said: “My main issue with business rates is that we get no value from them. Residents pay council tax and get their bins collected whereas I still have to pay Grundon £70 a month to take mine away.

“I guess linking them to turnover might help. It’s a tricky one because I understand that the money has to come from somewhere and if you simply reduced them you’d have to make it up in another way. They make life harder for small businesses, that’s for sure.”

Barry Wagner, owner of butcher Gabriel Machin in Market Place, said: “I think they charge enough as it is and don’t see why they should put it up any more. We’ve got a couple of empty premises in the town as it is and any increase is going to make it even harder to fill them.”

Hilary Redhead, manager of the Bell Bookshop in Bell Street, said: “We’re on tenterhooks waiting to see what the new rates will be.

“High streets everywhere are struggling at the moment and an increase doesn’t help matters. We’re holding our own and doing pretty well but we’re hoping they don’t go up significantly because it would definitely have an impact.”

District councillor Joan Bland, who runs Asquiths teddy bear shop in New Street, said: “Rates are a huge burden and ridiculously unfair. I certainly wouldn’t want mine to rise any further.

“The whole system is completely outdated and desperately needs to be rethought because online businesses that are run from home don’t pay a penny. It’s killing off high streets and more traditional businesses.

“It’s crippling to pay so much on top of other costs like rent and VAT and makes it harder for start-ups to get ahead or existing businesses to expand. It takes a big slice off the top and leaves much less profit.”

When he announced the Budget on Wednesday, Chancellor Philip Hammond promised that no business losing rate relief would pay more than an extra £50 a month in the coming financial year.

A “transition fund” has been set up to help affected businesses adjust to the increase.

The Treasury has also set aside a £300million budget for councils to offer “discretionary relief” in hard-hit cases.

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