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22nd September 2023
Plus 22 and dry when waking in Gallipoli..
Happy Friday – in Kim’s absence he suggested I do his blog (John Webber) – or I may have volunteered – we were at 131 so fine wine was involved !
It was interesting reading Cornelius Lysaght blog this week – he is often mentioned in the ‘owners of the month’ focus on the blog as someone you would invite to dinner . As a Chartered Surveyor and business rates specialist I am the person you avoid at dinner parties and if you do unfortunately sit next to me you pray you can change seats after each course !
As Head of the Rating Team at Colliers I am lucky to act for a variety of organisations across the country as well as a number of businesses in the racing industry – as representatives for TBA / NTF(along with Christopher Marriot) . We also act for The Jockey Club and many independent racecourses . My role is to call out the Government and the opposition parties of the day as well as civil servants and point out where they are going wrong in policy terms – its not difficult they have all been making a mess of it over the last 20 years .
I thought I would try and explain business rates – what I think needs to change ( it really isn’t that hard to work it out ) and how it affects the racing industry and what the opportunities there are to reduce liabilities and help business .
Business rates have been around in a modern sense since 1601- and were introduced by Elizabeth I – (The Elizabethan Poor Laws) to pay for the ‘impotent poor’ in each parish .Various forms existed long before then . Today people arguethey are archaic but in many ways because they have been around that long is a testament to their strength – its only politicians in recent years that have resulted in calls for its abolition .
So what is a Rateable Value – well it’s the hypothetical rental figure that the Valuation Office Agency ( Govt agency of HMRC) place on 2.15 million premises in England and Wales ( don’t get me started on the police state that is Scotland when it comes to business rates) so it’s the opinion of a Civil Servant of what the tenant would pay to rent premises based on a specified valuation date.
So for the current rating list – known as the 2023 Rating List it’s the Governments opinion of what someone would pay to rent say a racecourse like Cheltenham on 1 April 2021 . In fact the value has been set at £3.8 million . So what a civil servant has estimated is that on a date when you couldn’t actually open the facility to any paying customers and the festival had just been conducted behind closed doors you would pay a rent of nearly £4 million per annum a 25% increase from the 2017 Rating List !
So in many ways that is where the opportunity is on the 2023 Rating List – covid and its restrictions have to be reflected – what would the hypothetical tenant pay to rent a pub/shop/ racecourse you couldn’t open to the public – the answer may not be nothing but it’s a good starting point !
The biggest issue with rating apart from the VOA getting it wrong is the actual multiplier / Unform Business Rate or in old money the old rate in the £ . Its what you multiply against the Rateable Value to give the amount you have to pay each year.
In 1990 the multiplier was £0.34p – basically you paid a third of your rental value (Rateable Value) in business rates . Unfortunately as of today it is £0.51p and rising – so after 13 years of a Conservative administration (Lib Dems don’t count as they did as they were told) we have a 51% tax rate !! That is the elephant in the room and it is unsustainable.
Out of 2.15 million properties in the Rating List 600,000 don’t pay anything which means the ones that do pay more and more - have a look at the High Street to see where that plays out ! Business rates don’t need abolishing but the multiplier should be circa 30% or £0.30p .
The Labour Party have said they will abolish business rates but unless they can find £26 Billion down the back of the sofa they may struggle and the Lib Dems are all for a Land Tax which in academia may seem a good idea but in the real world will not work .
The British Racing Industry has plenty of headwinds as do many parts of the economy but please be assured that we are fighting hard to make sure that your business rates liability is not excessive .
If you have got this far you deserve a bit of light relief . A good friend and neighbour David Moore sends me jokes and videos most days – I rarely open them on my work phone in fear of a tap on the shoulder from HR but this is one I was brave enough to read :
Norman, an old retired sailor, puts on his old uniform and heads for the docks once more for old time's sake.
He engages a woman of the night and takes her up to her room.
He's soon going at it as well as he can for a guy his age, but needing some reassurance, he asks, 'How am I doing?
The lady smoothly replies, 'Well Norman, you old sailor, you're doing about three knots.'
Three knots?' he asks. ' What's that supposed to mean?'
She says, 'You're knot hard, you're knot in, and you're knot getting your money back.'
Looking forward to the dinner invites .