Union in calls for rates rise cut for rural firms
AFARMING union is calling on the Government to help the rural economy by cutting the proposed rise in business rates.
From April 1, many businesses will see their rates increasing dramatically, affecting many rural firms and prompting the Farmers’ Union of Wales to call on Chancellor Philip Hammond to use his Budget next month to reduce the increases.
The last time rates were set was seven years ago, but property price changes since then have led to big winners and losers.
Rates will fall for 920,000 businesses, remain the same for another 420,000, and increase for 510,000 across the UK.
Under the current scheme, business premises with a rateable value of up to £6,000 will receive 100% relief and those with a rateable value between £6,001 and £12,000 will receive relief on a tapered basis from 100% to zero.
FUW head of policy Dr Nick Fenwick, said: “We have written to the Chancellor to highlight the extreme impact these changes will have on large numbers of businesses, but we would also urge businesses to contact their MPs and AMs.
“Many farm businesses which have tried to make up for falls in income by diversifying are now seeing their efforts wiped out by this rise.”
The Meirionnydd branch of the FUW met with their local MP Liz Saville Roberts to discuss the increases, how business rates are set and how the basis for the rates can differentiate between businesses.
FUW Meirionnydd county executive officer Huw Jones said: “This is an issue which would greatly affect the Dwyfor Meirionnydd constituency, which is considered one of the poorest throughout the UK in terms of household income.
“But it will also have a devastating effect across Wales and our rural communities. Some businesses are seeing hikes of £15,000 or more, threatening their viability.”
Livestock auction markets are facing an average increase of 86% in rateable values, and the repercussions will be felt far beyond the auction ring unless affordability and running costs are considered when business rates are calculated, the Livestock Auctioneers Association (LAA) warned ahead of a meeting with the Valuations Office Agency (VOA) later this month.
The valuation for rating of a livestock auction market is based on its turnover, and most marts have shown significant rises in turnover during the period eight years since the last revaluation.
But costs have also risen over the same period and most marts have seen no improvement in margins, industry experts say.
Chris Dodds, LAA executive secretary said: “Many of our members are telling us that they will either need to change something drastically to make their business viable, or cease trading.
“Some of our larger markets are facing rises of 200% or even 300% and this threatens the sustainability of the industry. Markets are the heart of the rural economy, and have an important social responsibility beyond the auction ring.”
The LAA warned that these cost increases will filter down the supply chain and eventually affect livestock farmers.
About 20% of an auctioneers’ commission goes on business rates and this figure is likely to increase, the organisation said.
Mr Dodds added: “The LAA position is clear and we appreciate as an industry we must make our fair contribution to finance local authorities and services. We also appreciate that the 2010 valuation took into account the foot and mouth and blue tongue disease outbreaks.
“But it does mean that it is now eight years since the last valuation. We always anticipated a rise, but these increases are beyond anything that may have been predicted.”
The LAA will meet with the VOA’s head of livestock markets at the end of this month to argue the case on behalf of its members across England and Wales.