Norfolk pub gets shock with a 1,300pc business rate rise - find out the changes for firms in your area
- Credit: Archant
The full impact of a rates overhaul on businesses in our region can today be revealed - including a Norfolk pub hit by a 1,300pc increase.
A nationwide revamp of the system goes live tomorrow and research done for this newspaper reveals how different areas will be hit.
Some business owners, including pub landlords, warned they would struggle to survive without putting up prices.
But other parts of the region have escaped almost unscathed, with bills in Watton going down by on average 8.5pc in 2017-18.
The research done by CVS Business Rates and Rents Specialists, using government figures, shows firms in north Norfolk, particularly in coastal towns, will be the hardest hit by the newly-calculated valuations which are used to set business rates.
Jason Bumphrey, who runs the Foundry Arms in Northrepps, found his business rates had gone up by 1,300pc. The 51-year old was being asked to pay £3,340 over the next 12 months - and that included a £4,000 discount for 'transitional relief' brought in to ease the pain of the government's new business rate valuations from April 1.
In 2016/17 Mr Bumphrey had to pay just £243 as the pub qualified for small business rate relief which gave him almost £2,900 off his bill.
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But he was hit by the rateable value of his business - an estimate of a property's rental value which is used to calculate his business rate - more than doubling to just above the figure at which he could get business rate relief.
'It is such a dramatic increase for us,' he said. 'We are going to have to put prices up which is not something we want to do. We're a small country pub. It is just outrageous. Hospitality trades around us are similarly affected.'
The day after the shock of Mr Bumphrey's bill, chancellor Philip Hammond delivered his first budget.
He announced a £300m fund for councils to help businesses facing the biggest rises in rates, a £1,000 discount for pubs for the next year and small firms which lose their rate relief, such as Mr Bumphrey's, would see increases capped at £50 a month.
Firms in the postcode areas of Wells, Hunstanton, Melton Constable, Holt, Sheringham. Cromer, as well as Southwold, are seeing the largest leaps in the area in their rateable value.
In Wells, rateable values are increasing on average by almost 37pc and from Saturday firms will pay an extra 10pc in business rates.
Steve Brundle, from the Golden Fleece, said the rise could have an impact on prices. 'The margins are not huge in our business,' he said. 'Businesses don't mind paying a bit extra as long as services increase. But they feel they are paying more and not getting any more services.'
Robin Golding, from Golding's sweet shop in the town, said he would have to pay an extra £1,000 a year in business rates, an increase of 20pc, but with transitional relief, that came down to an additional £350. 'It will have an impact,' he said. 'I don't know how some businesses pay their rents and rates.'
Further along the coast, Mike Ruston from the Hunstanton and District Chamber of Trade, said the changes were not high on the agenda of firms in the town, despite our research showing rateable values are increasing by almost 20pc in the area. 'I think there is probably a degree of resignation,' he said.
On average in North Norfolk the rateable value of businesses is going up by 16pc since the last calculations were done in 2010. That compares to a 4pc average increase in Norfolk as a whole.
The discounts and transitional arrangements announced by the government mean that businesses in north Norfolk will pay an average of 4pc more in business rates from April 1.
At the other end of the spectrum, King's Lynn, Watton and Scottow will see their rateable values fall.
In the Great Yarmouth Borough Council area, the rateable value is going up by just 1.44pc and in West Norfolk it is increasing by 2pc.
The government claims there are more winners than losers under the changes and it is currently consulting on how to distribute £300m to help the hardest-hit companies.
North Norfolk is scheduled to get around £500,000 in 2017/18 and £250,000 the year after that from the fund.
North Norfolk District Council said it was still awaiting the final details from the government while the consultation was carried out.
Analysis: More winners than losers, but losers lose big
The government says there are more winners than losers from the business rate changes.
In theory the places which have done the best economically since 2010 will have seen the biggest rises in rents and will therefore rightly have the largest increases in business rates.
Rents are used to calculate the rateable value of a premises which in turn is used to work out business rates.
It means areas which have not done as well should pay less.
But transitional discounts and the loss of business rate relief for some small firms means it is not as simple as that.
In Walsingham, for example, businesses will be thankful that while rateable values have gone up by almost 16pc, business rates will only increase this year by just under 2pc.
Generally, however, the areas with the biggest increases in rents between 2010 and 2015 will be asked to foot the biggest bills.
Southwold is seeing a massive 53pc increase in rateable value, and an increase of 9pc in rates payable next year.
But more detailed analysis, looking only at shops, shows Southwold will see the largest increase in rateable value of any place in England and Wales at 152.48pc.
Jenny Stockman, chairman of Suffolk Coast Business, said taxing areas which were doing well hit the smaller independent businesses the hardest and threatened the range of shops which made the location attractive in the first place.
The chancellor's budget measures to mitigate some of the rapid rises will of course help. Suffolk Coastal will get £406,000 in 2017/18 for businesses worst-hit, but these measures are for the short term.
Many businesses are still in an uncertain situation of waiting to hear whether or not appeals against have been successful and what relief they may be able to get.
Mark Rigby, chief executive of CVS, said; 'The purpose of a business rates revaluation is to try and achieve fairness by ensuring that tax liabilities are based upon up-to-date rental values.
'Revaluations create 'winners' and 'losers' as ratepayers' liabilities are shifted in line with relative movements in property values since the previous revaluation.'