Business rates. The silent corporate raiders

Business rates. The silent corporate raiders

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A young Austrian client rang me up the other day and asked me for help with her domestic rates. I told her we’re accountants; someone else deals with rates. Who? No idea. So Doug, you deal with personal tax, corporation tax, fuel tax, VAT, insurance tax, other indirect taxes, PAYE and national insurance, self-assessment, partnership tax, tax on benefits and LLPs and sundry other taxes but not rates? The other taxes are set nationally; rates are a local government tax. But they’re a tax, and you don’t deal with them. Well, yes. And you don’t even know who does? If you were a business you could try ringing a surveyor, I said helpfully. Domestic rates? No idea …..

The other problem with business rates are these helpful companies that cold-call. The ethics of the contingency rates-rebate boiler-house industry are for others; hearsay tells us to put the phone down, with many horror stories of clients being small-printed.

The networking dinner I always attend is the Vistage Alumni hosted by that giant of a man, physically and as a personality, Charles Llewellyn. This year I met Matthew Kirby, Head Yak Driver at Chozen, founder of my favourite fast-food emporium, and delighted in showering him with praise. Aiming never to be negative, I do try and utter only genuinely-believed positive: the brown-rice option, the generous portions, the excellent and varied sushi, breaded prawn and chicken side dishes, the noodles and the salads. Hannah and Kirsten enjoy an early evening burger in Beaconsfield, when collected from work, for the late-night big-Jag Edinburgh dash. Chozen’s outlet at the service station is one of its best, and is an authorised paternal travelling feast; so everyone’s happy.

I first fell in love with Chozen during half-a-dozen happy years working in Borough Market, before Hannah moved in, and I grabbed the opportunity better to get to know No1 (chronologically) daughter, and moved HQ home.  I said to Matthew I was surprised he’d given up what was an ideal site at the top of Borough High Street, pretty much a flagship. The quality of the food sat well alongside the various wonderful but pricey independent outlets in the market, emphasising the value for money that Chozen represents.  Matthew said that the rent was being tripled from £50,000 to £150,000 so that would make the site uncommercial. I said I would have thought such a site could take a £100k hit. Yes, Matthew agreed, but not £200k, taking into account a corresponding hike in business rates; particularly bearing in mind it wasn’t likely to end there. So that’s it: a successful young business pushed out by business rates. By that stage I’d pressed most of Matthew Kirby’s buttons:

“Business rates is almost a stealth tax, often applied without logic. Take our Beaconsfield and Cobham locations. Absolutely identical in footprint and other factors (both in service stations) and pretty similar. Rates increase in April 2017 will be a very modest 2.5% in Cobham, and 104% in Beaconsfield! Ridiculous. We will have to fight the latter and share any relief with the surveyor. So much for the government trying to look after the High Street. No rates on the internet so retailers once again disadvantaged. End of rant”.

www.chozen.co.uk

I can’t be the only accountant outraged by our own complicity. For years we’ve been telling ourselves rates are someone else’s problem. My Austrian client is right. Firms up and down the country are waking up, ensuring clients gain the same level of protection from the business rates, as they do from revenue and customs and all the other iniquitous disingenuous stealth-raiders.  The state can stick its ingenuous immoral avoidance and evasion rhetoric. It takes too much and wastes it. Accountants in blue woad are bouncing back to flush out iniquity. With Trump shaking up America like it’s 1776, no taxation without representation has never felt a more relevant anti-establishment battle cry.

Douglas Shanks is DSC Metropolitan’s purple-faced railing-at-the-rates-with-swagger-and-attitude partner.

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