WAG Consultation on Proposed arrangements to provide transitional relief to support small businesses adversely affected by the 2017 non-domestic rates revaluation’

WTA Members recently, raised the issue of BR & Transitional Relief as an agenda item at our WTA member’s meeting on the 25th October 2016. WASCO have raised a number of issues with which we concur (and is reflected below in some of our comment). Whilst we broadly welcome the proposal to provide what will amount to much needed transitional relief to assist those ratepayers facing a significant change in their liability:-
 
We also hope that any measures implemented as a result of this consultation should safeguard the positive contribution tourism makes to the Welsh economy as we outline above. We also urge the need for scrutiny and debate to be undertaken beyond this consultation and welcome the recent reinstatement of the Tourism Cross Party Group under the Chair of Suzy Davies AM
 
The WTA notes that the UK Government has extended the threshold for full SBRR to £12,000 with tapered relief above £12,000 up to £15,000. It also makes provision for transitional relief. The Welsh Assembly Government does not propose the increase of the current thresholds for SBRR, but does propose to grant transitional relief for businesses currently receiving full SBRR, but no longer able to do so from 2017 onwards. The WAG does not propose any other distinctions. We would like to see parity with the rest of the UK. We are concerned that that this difference could put Wales based tourism business at a competitive disadvantage.
 
The survey by WASCO of their members shows that ‘the proposed 2017 revaluation has again increased their rateable values. For the vast majority (80%) of respondents’ businesses with a 31% increase or more, of which one third is even hit with increases of 71% or higher! It also shows that for the relevant years, for a majority of the respondents turnover decreased or stayed the same. For the remaining respondents reported growth is less or very little more than 10%’. This reported change is alarming.
 
The proposed transitional relief for self-catering businesses with a rateable value of £6,000 or below currently, but with a rateable value above £6,000 in 2017 is not unwelcome, but it does not address the fundamental imbalance between set rateable values for and the earning capacity of many businesses. We share WASCO’s concern that Business Rates and their application have the potential to threaten the viability of self-catering businesses, especially ones that have several units within the same curtilage, who are largely or fully dependent on their self-catering business for their income, and whose rateable value exceeds the current threshold for full SBRR of £6,000.
 
Many businesses in the tourism industry in Wales are run on very tight margins. Couple this to the increasing dependence to on on-line travel agencies, who skim off much of the slim income and the available profit left after an increase in taxation, this could mean that many businesses could simply decide to retire and close for good thus actually reducing the amount of Business Rates raised in the medium to long term.