Monmouth and District Chamber of Trade and Commerce

Council and chambers urge businesses to take prompt action on draft revaluations

Monmouthshire County Council is to urge the Welsh Government to postpone draft proposals for massive hikes in the county’s draft business revaluations.  This call, made at a meeting of the county council on Thursday 1st December, aims to allow time for a thorough review of the methodology and results of the revaluation.  It comes after Deputy Leader of the Council, Cllr. Bob Greenland, officers and a local chamber of commerce representative met with senior officials of the (Valuation Office Agency) VOA at County Hall on 30th November to discuss the matter.  Recently-proposed rateable values are based on the rental value of properties at 1st April 2015, reflecting changes in the property market across the country since the last revaluation came into force in 2010 based on 2008 rental values.

The Valuation Office Agency has published the draft valuations now to give businesses the opportunity to go online and check their proposed assessments. If businesses think the information about their property is factually incorrect and they therefore do not agree with the proposed level of assessment they can contact the VOA by e mailing them at: nsorevalenquiries@voa.gsi.gov.uk.  – the VOA will aim to respond within 40 working days. The valuations are effective from 1st April 2017 and only at that point can a formal appeal be made but ratepayers are encouraged to get in touch about their valuations for an informal review as soon as possible.

To find and review their rateable value and get an estimate of the 2017-2018 bill, businesses should go to https://www.gov.uk/correct-your-business-rates but note that a new transitional relief scheme is planned though this has not been factored into the online assessments.

Businesses failing to ask for a review by 1st April 2017 will be billed on the proposed assessments. If they launch an appeal after that date they must commence the payment of business rates in line with the revised revaluation rates.  In addition, they will only be able to claim back any incorrect amount if a formal review is requested and the case proved.  If the case is not proved an appeal may be made to the Valuation Tribunal for Wales but as this is a time-consuming process businesses are urged to act quickly.

Deputy Leader Bob Greenland said: “Having sought clarity from the VOA on the business revaluation hikes we urge businesses to take immediate action to address any revaluation errors.  This revaluation is of such importance to our businesses in Monmouthshire that it was discussed by all members in Council on Thursday, 1st December when I successfully proposed a motion urging Welsh Government to postpone these draft proposals to allow time for a thorough review of the methodology and results of this revaluation. Alternatively we call upon the Welsh Government to postpone any increases until the results of the appeals are known.  And finally, we look for sympathetic transitional arrangements for all businesses.  The Welsh Government has announced a transitional scheme for small businesses, but has not done the same for larger businesses which will be harder hit.

“I have also made representations to Welsh Government, sending a letter to the First Minister and drawing his attention to the serious consequences for many of our businesses in the County. Whilst most council areas in Wales, including Cardiff, have seen net reductions in rateable values through these proposals, in Monmouthshire we have seen over 65% of business rates increased, some hiked by as much as 300% with a few even above that. We will continue to work with our Assembly Member and Member of Parliament to get a fair and just settlement for our businesses"

David Cummings, Chairman of Monmouth and District Chamber of Trade and Commerce was authorised by business organisations in the county to represent all 3,167 businesses with rateable premises at the meeting.  He said: “Following our very constructive meeting with the VOA, the council and I have agreed a joint strategy to work together in the best interests of businesses badly affected by the rate revaluation.  This strategy relates to our approach to the VOA as well as our dealings with the Welsh Government on transitional relief and on possible changes to existing Small Business Rates Relief.“

Monmouth Chamber suggests radical solutions to the business rate crisis

“David Cummings, Chairman of Monmouth and District Chamber of Trade and Commerce commented:

There has been a great deal of discussion around the crisis for small businesses created by the business rate revaluation, which will affect business rates payable from next April. We believe the time has come to dismiss ideas that are not achievable and to make sure that small businesses in Wales are treated the same or better than those in England. After all, and a thought that the Welsh Government seems to have missed, 96.4% of all businesses in Wales are micro , i.e 9 employees or less. They are the heart that provides the lifeblood of the economy of Wales. Our proposals are based on thorough research of this complex subject, with input from experts on the rateable value issue.

Firstly let’s dismiss a proposal that is completely unachievable. The Valuation Office are not going to set aside the rateable value revaluation published on 30th September. There is no money to re-do the revaluation of tens of millions of British business premises.

So what can be achieved? We have proposed that Monmouthshire County Council create a fund to finance a firm of chartered surveyors who are experts in business rate appeals to represent small businesses in dealings with the Valuation Office. This would take the form of groups of businesses from rateable value revaluation hot spots having a combined appeal.

The next proposal we make is to have the same support as small businesses in England. It is not acceptable that the Welsh Government are expecting businesses to wait until April 2018 for a new Small Business Rate Relief (SBRR) system. By then many businesses, which have been unfairly assessed on rates, will have closed.

The first step of support that Welsh Government should take is to double the rate of 100% SBRR from £6000 to £12000 and raise the tapering relief from the current start level of £6001 to £12,001 with tapering relief going on to £15,000. Better still make it £20,000. If English businesses can receive this level of support for 2017 onwards, why not small Welsh businesses?

No doubt the Welsh government will counter this proposal saying that they have proposed transitional relief with increases in business rates being phased in over four years from April 2017. However, the Chamber believes that this is like giving a tornado warning for four years hence. Their business will still be destroyed in 2021, unless, of course, they move to England In England the self funding Transitional Arrangements likely to be approved would limit the amount of increase in 2017/18 to just 5% for a small business.

Our next proposal is that Welsh businesses should benefit from the same favourable multiplier that will be enjoyed by businesses in England from April 2017. What is the multiplier? The multiplier works on taking your business rateable value and multiplying it by an amount in pence to give you the amount of rates you will actually pay. In England the multiplier is lower for companies up to £51,000 rateable value. Why can’t this favourable multiplier be available in Wales?

In conclusion, we believe the proposals we have made above are simple and achievable, if decision makers will listen. They could all be in place ready for April 2017. The ball is now most definitely in the court of Monmouthshire County Council and the Welsh Government for a response. We await with interest their comments on our proposals.

There is hope for hard pressed businesses on the rateable value issue

15th November 2016

David Cummings, Chairman of Monmouth and District Chamber of Trade and Commerce commented:

"Yesterday evening I met with a representative of the Valuation Office and questioned them at length about the way in which the rateable value increases had been calculated. It is evident that most of the information on rents at April 2015 came from letters sent during the consultation process to landlords and tenants. In broad terms, the proposed new rateable value of a business should equal the yearly rent at that date.

The representative said that if businesses had a revaluation that was likely to cause financial distress then the Valuation Office would discuss matters with them now. If your businesses is likely to be in financial distress as a result of the proposed rateable value increases then go to https://www.gov.uk/business-rate-appeals/how-to-appeal to find out more and do contact them. I can find no wording on the .gov.uk website that explains the right to appeal now, so it is not surprising that so few businesses have been in touch with the VOA!

If you do contact them, then please give me a report on your experience emailed to chairman@mdctc.co.uk. Please note that I can only help businesses on an NP25 postcode. I am hoping to attend a meeting at the end of the month with the Valuation Officer at MCC and will raise your experiences, good or bad, with them then.

It is most important for businesses to act now and not wait until April".

MDCTC Transition response

MDCTC

Local Government Finance Policy
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

 

3rd November 2016

Re:  Response to proposed arrangements to provide transitional relief to support small businesses adversely affected by the 2017 non-domestic rates revaluation

 

Dear Sirs,

Despite the revaluation exercise only being completed on 30th September businesses and other organisations have been asked to comment by 4th November on the transitional arrangements, which will benefit those previously or post April 2017, as being eligible for Small Business Rate Relief. We regard this six-week consultation period as a ridiculously short time scale for the consultation and it is likely therefore to make the result unbalanced.

As initial future instigators of these transitional arrangements and final recipients of business rates income, we believe that the Welsh Government had a duty to inform the businesses of Wales and those organisations representing those businesses, not only about these transitional arrangements, but also about the results of the business rateable value revaluation. This the Welsh Government has singularly failed to do. Instead it has relied on the media to raise awareness of both exercises. Not only was our Chamber unaware of the results of the revaluation and of the proposed transitional arrangements, but so were South, Mid and West Wales Chambers of Commerce. We find this unacceptable when the Welsh economy is dependent on 96.4% of businesses, which are micro businesses (9 employees or less) and where business rates represent a significant part of their operating costs.

Transitional arrangements may seem in concept to be a good idea, but it is only designed to assist those businesses who were, are and will be, entitled to Small Business Rate Relief (SBBR). It is evident from research on the www.tax.service.gov.uk website that we in Monmouth have many small retailers who were slightly above the £12000 SBRR limit and now face average 50% increases in their business rateable value. The highest identified so far at 137%! This would suggest that the SBBR limit should be raised for 2017/18, perhaps to £20,000 or £25,000. The Welsh Government’s delay in examining Small Business Rate Relief until 2018 is again unacceptable, as proposed rate increases will happen next year.

Businesses are seemingly denied a route to make representations about proposed changes to their business rates other than through the appeal process, which begins in April 2017. This too we find unacceptable.

Monmouthshire is the county most affected by business rateable value revaluations with increases in the retail (11%), Offices (10.5%) and Other (13.5%). This may indicate that the valuation process adopted for the county was seriously flawed. The Welsh Government consultation document clearly states that there will be winners and losers from this revaluation exercise. Most small businesses in Monmouthshire will be losers and, as the overall take of the Welsh government from business rates is supposed to be the same after the revaluation, it means the businesses of Monmouthshire are in effect subsidising businesses elsewhere.

We believe that the results of the revaluation for Monmouthshire are so at odds with the other unitary authorities in Wales, as to be worthy or more investigation and special treatment. We propose two options to resolve this major threat to the viability of small businesses in our county, as follows:

  • The valuation is set aside and the exercise undertaken again. We consider this unlikely as there are 3167 businesses with premises in the county, or

  • All businesses whose rateable value has increased by more than the county average to have their appeal heard ASAP and not have to wait until April 2017

We are happy for our comments and contact details to be displayed in full on the VO website

 

Yours faithfully

 

David Cummings FIAB

Chairman, Monmouth and District Chamber of Trade and Commerce

Business rateable value revaluation - the emerging picture

31st October 2016

There has been a great deal of local and national press coverage on the very adverse effects the increases proposed for 2O17/18 will have on small businesses. In Wales we are a country of small business with 96.4% of businesses being designated as micro i.e 9 employees or less. Particularly hard hit with business rate increase proposals are small retailers

The Valuation Office (VOA) in their report say there will be winners and losers and that the overall take from business rates will not increase. Nearly all counties of Wales have seen rateable values in the retail sector fall for 2017/18. Only Conwy with 4.7% increase and Monmouthshire with 11% average increase have seen material increases as a result of this VOA exercise.

Looking more specifically on a local basis, it is evident that small retail businesses in Monmouth have seen dramatic increases in the rates they will need to pay in 2017/18. I have conducted research on-line on the VOA site of 25 small retailers and the average increase in percentage terms of rateable value is 50% and the highest a huge 137%. New rateable values should broadly equate to rental values in April 2015. There is evidence that some rental values have actually decreased, not risen dramatically. If the Welsh Government had tested the effect on a sample basis of businesses this would have highlighted the anomalies in the revaluation.

Over the last week Monmouth Chamber has been in contact with officers responsible for business development at Monmouthshire County Council. Informatian we have provided has ensured that the subject of business rateable value revaluations has now been given top priority and I am confident that will play their part to secure a more equitable result.

Despite the revaluation exercise only being completed on 30th September businesses have been asked to comment by 4th November on the transitional arrangements, which will benefit those previously or post 30th September as being eligible for Small Business Rate Relief. lt would seem that the Welsh government have decided to conducf this consultation in a passive way, i.e they have not contacted organisations representing businesses such as Chambers of Commerce . We regard this approach as highly regrettable and WG inertia as unsatisfactory. Monmouth Chamber will be making representations by 4th November deadline mentioning, amongst other matters, the ridiculously short time scale for the consultation and the lack of contact with key stakeholders.

Transitional arrangements may seem in concept to be a good idea, but is only designed to assist those businesses who were entitled to Small Business Rate Relief SBRR in 2016/17. lt is evident from research on the VOA website that we have many small retailers who were slightly above the £12000 SBRR limit and now face 50% increases in their business rateable value. This would suggest that the SBRR limit should have been raised far 2017/18, perhaps to £20,000 or £25,000.

The Chamber considers that the Welsh Govemment should have looked at the revaluation figures and anticipated this crisis, especially for the counties of Monmouthshire and Conwy. Rest assured that the Chamber will continue to liase with MCC and take the matter further with Assembly Ministers and in particularly Ken Skates, Cabinet Secretary for Economy and Infrastructure.

I am in communication with a chartered surveyor from the Welsh Ratepayers Forum , which is a body recognised by the Welsh government to make representations on business rate issues, to come to present on this matter at our Chamber meeting on 21st November. NonChamber members are welcome to attend the Chamber meeting, but must book with me first by email to chairman@mdctc.co.uk by 14tn November. Further details of the meeting can be found at www.mdctc.co.uk.

David Cummings

Chairman, Monmouth and District Chamber of Trade and Commerce

chairman@mdctc.co.uk