Battered by the business rates scandal

The 114-year-old china shop. The family pie maker. The much-loved book store. 18 months after the Government promised to help Britain’s struggling High Streets, they are STILL being . . .

NESTLED on the Jurassic Coast in Devon, the picturesque seaside town of Sidmouth is a haven for tourists. Set against a backdrop of red sandstone cliffs, its pretty beach and bustling High Street attract thousands of families every year.

But locals say the historic area risks becoming a ghost town if its shops continue to close at the current rate.

Already this year, three have shut their doors or announced plans to do so. Many more say they are close to breaking point.

Shopkeepers say that, while local car parking issues and competition from online rivals are partly to blame, one of the biggest problems they face is crippling business rates.

Eighteen months ago, changes to business rates led to higher bills for more than half a million shops, restaurants and pubs.

Following a public outcry , government ministers hastily drew up plans for a £435 millionrelief package.

But many businesses say that help never reached them, or that it was not enough to save them. The Government claims that, for most shops, last year’s rates reshuffle led to no change or to even lower bills.

But more than 8,000 High Street shops are estimated to have closed over the past 18 months, with one in eight shop units i n E ngland and Wales now standing empty.

On Britain’s worst-affected High Streets, campaigners say independent shops are falling ‘like dominoes’ as punitive rates force them out of business.

Today, as Money Mail reveals the true scale of the crisis, we renew our call for a major review into the out-dated levy.

114-YEAR-OLD SHOP FORCED TO CLOSE

CHINAWARE store Govier’s, which opened in Sidmouth in 1904, is expected to close by the end of the year.

The shop, which has run for 114 years, has made a loss in recent times. Going forward it has decided to operate only online and through a mail-order catalogue.

Alan Morgenroth, who has owned the store for 34 years, says high business rates are partly to blame for his decision to shut the doors.

Business rates are based on the income a property could hypothetically make if it was rented out, a calculation estimated by the Valuation Office Agency.

But critics say this punishes small shops in areas where property prices have soared in recent years, particularly pretty market towns.

Alan currently pays £9,818 a year in business rates, up from the £8,816 he paid in 2012.

Alan, 60, says: ‘It ’s devastating to close, we are one of the few truly i n dependent shops left in Sidmouth.

‘I don ’t have a problem with charity shops [which are exempt from 80 pc to 100 pc of business rates] but Sidmouth is now known as the ‘charity shop capital of the South West’.

‘The Government has done very little to support High Street shops. Then you have the online businesses, which might not even be the giants like Amazon, but may operate from a backroom and don’t have to pay these rates.

‘They can undercut us and offer the same items at lower prices’, he adds.

Stewart Hayman, 67, says his 111-year-old family butcher’s firm made ‘practically zero’ profit last year following a huge increase in business rates.

He pays £7,800 a year — around £2,000 more than five years ago.

Stewart, who has worked at Hayman’s Butchers for 51 years, says: ‘On Church Street we are one of only two businesses which are actually paying rates. Many of the other businesses are charity shops,’ he says.

‘I think if we didn ’t own the building and were paying rent on top of all these costs, we wouldn ’t be here.’

John Wycherley, 64, and his wife Jeannie have run Sidmouth Gifts for five of the 40 years the shop has been open. In 2015, the owners were paying £ 5,950 a year in business rates. This year , they must fork out £7,738.

John says: ‘The whole system needs to be changed so that rates are based on income, rather than property value.

‘Internet-based companies such as Amazon get away with not paying these high rates while High Street shops have to foot the bill.

‘Areas such as ours tend to have higher rateable values because of the property [market]. Sidmouth is a well- off area full of second homes and pensioners who worked in London.’

In April 2017, the Government undertook the first revaluation in seven years of shops’ rateable worth — the rental value on which business rates are based.

But while three - quarters of businesses saw their bills fall or stay the same, some were hit with annual rate rises of thousands of pounds.

According to research compiled for accountancy giant PwC, an average of 16 High Street stores closed every day in 2017.

This means an estimated 8,400 shops have closed since the rates were revalued last April.

According to the PwC data, there were substantially more closures in the second half of last year — PRINTED AND DISTRIBUTED BY PRESSREADER