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A taxing problem for business

November 28, 2019

 

One subject guaranteed to get raised at election time is that of business rates. Yet meaningful change looks as remote as ever.

 

National Non-Domestic Rates (NNDR), as the tax is officially known, is a bit of an arcane arrangement.

 

As it happens, it’s not going to be a UK election issue in Wales as business rates were devolved four years ago.

 

The approach is the same however, with each eligible commercial property being assigned a notional rental (rateable) value. Officials then apply a multiplier (currently 53%) and the result appears on your bill.

 

The monies are collected by local authorities and paid into a national ‘pool’ administered by the Welsh Government. This is then redistributed to councils and the police as part of the annual settlement.

 

The job of coming up with a rental equivalent is done by the Valuation Office Agency (VOA) while it is Cardiff Bay who set the multiplier - plus any relief that the government thinks should apply.

 

My experience is that there are two main drawbacks from a small business perspective. The first is that rateable values seldom bear any relation to market conditions. The second is that it can take up to seven years for reassessment, resulting in huge variations.

 

I know of one instance where a local restaurant saw their business rates soar in April from £3,800 to £18,000 overnight. It’s claimed by retail groups that Wales currently has the highest rates in Britain.

 

The Federation of Small Businesses in Wales calling for more frequent valuations but others reckon that radical change is needed

 

Back in 2015, Prof Gerry Holtham argued that the system which dates back in some respects to Elizabethan times should be scrapped in favour of an outright property tax.

 

Others have since made similar suggestions but needless to say, there’s not much appetite at the top for such as political hot potato. Maybe the next election, eh?

 

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Old tricks find new ground

 

I’ve been reading how someone recently nicked the Liberal Democrat placard from outside Chris Holley’s house. Upset as he might be, I’m sure he’s known worse in his time.

For example, former Conservative candidate Byron Davies saw his billboards disappearing like a small rain forest in Gower at the last election.

 

Whether you approve or not, electoral ‘sharp practice’, as it’s quaintly described by the code of conduct, has been a hallmark of political life for centuries.

We canvassers were continually warned by the election agent to always fully push the candidate’s leaflet through the letter box; lest the opposition drag it back out again.

Older political hands will also know the wheeze of inviting an opposing candidate indoors for tea and a chat, thus robbing them of fifteen minutes of door knocking elsewhere.

Social media of course has taken things to a new level. Conservative HQ adopting the guise of an independent fact-checking service during last week’s leadership debate is a case in point.

 

Yet it was intriguing to see how other practitioners of the dark arts seemed torn between apoplexy and grudging professional admiration.

 

Old tricks, it seems, have no trouble in finding new ground.

 

 

 

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