Lancashire Telegraph‘High rates and rents’ blamed for Rawtenstall business closure (From Lancashire Telegraph)

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‘High rates and rents’ blamed for Rawtenstall business closure

Lancashire Telegraph: Other traders and supporters of Nate Nicholson, centre, back, outside the Deli Other traders and supporters of Nate Nicholson, centre, back, outside the Deli

A RAWTENSTALL trader, who has poured his life savings into his business, has closed it down as he can't afford to keep it running.

Nate Nicholson, owner of The Deli in Bank Street, said while attempting to rescue the business, he worked seven days a week and didn't take a holiday in three years.

But he said 'extortionate business rates' of around £1,125 per month and £6,000 to £7,000 in rent payments per month had taken their toll.

Mr Nicholson, who has run the business for seven years, said: “The business rates were extortionate.

“They differ from street to street in Rawtenstall, so rival businesses are paying completely different rates and it’s killing companies off.

“When I spoke to the council about it, they’ve told everyone on Bank Street to appeal to the Valuations Office Agency, but I did that two weeks ago and have heard nothing back.”

Mr Nicholson organised the first LGBT night in Rawtenstall, the first in Rossendale, in February.

He said: “I’ve made some really good friends and will really miss the customers.

“I haven’t made a wage in seven years and my health has suffered. I can’t keep doing this just to pay other people’s wages.

“When we took it on, Bank Street was a thriving business centre, but in recent years the number of shops has seriously depleted.

“Unless you want to buy spectacles, get your hair done or go to the estate agents, or go to a charity shop then you don’t go there.

“I feel bad for the businesses left there because people have told me they won’t go back now we’ve closed.” David Gould, the chairman of Rawtenstall Chamber of Trade, said: “I’ve bought lunch from there for many years. It’s a great business and it’s very sad to see it close.”

Mike Jones, director of Weale and Hitchen Estate Agents in Bank Street, said: “It’s really sad that they’ve closed. They’ve worked their socks off to stay open.”

Phil Seddon, Head of Finance and Property Services at Rossendale Council, said: “Business rates payable by a commercial organisation are set by the Valuations Office Agency. The council would advise any business, in the first instance, to lodge an appeal directly with the VOA if it feels their rateable value has been set too high.”

Comments (13)

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5:07pm Tue 15 Apr 14

vicn1956 says...

Hancocks sketch about a dull Sunday is what Rawtenstall has become.
Hope the council are proud.
The only reason I go there is the railway and the museum in the park.
Hancocks sketch about a dull Sunday is what Rawtenstall has become. Hope the council are proud. The only reason I go there is the railway and the museum in the park. vicn1956
  • Score: 9

5:28pm Tue 15 Apr 14

mavrick says...

It is not the councils fault for a change, Business rates are set by the government and the council are only collection agents. This is why we need more local control. every Business should appeal to the valuation office, The real problem is the people setting the rate woudn't know where Rawtenstall is.
It is not the councils fault for a change, Business rates are set by the government and the council are only collection agents. This is why we need more local control. every Business should appeal to the valuation office, The real problem is the people setting the rate woudn't know where Rawtenstall is. mavrick
  • Score: 6

5:39pm Tue 15 Apr 14

TheCaveman says...

I've tried the VOA route to get business rates reduced for an empty shop in an area with a lot of empty shops - basically you have no chance, the VOA will insist the rates were decided ages ago and can't change until the next review but the government keep putting off the next review - till after an election, for instance. It's a very short sighted policy - the councils continue to extort business rates even from empty properties, you can't claim small business rates relief unless you are trading and planning will refuse change of use - couple this with silly parking restrictions and it's no wonder businesses are dying with no way out.
I've tried the VOA route to get business rates reduced for an empty shop in an area with a lot of empty shops - basically you have no chance, the VOA will insist the rates were decided ages ago and can't change until the next review but the government keep putting off the next review - till after an election, for instance. It's a very short sighted policy - the councils continue to extort business rates even from empty properties, you can't claim small business rates relief unless you are trading and planning will refuse change of use - couple this with silly parking restrictions and it's no wonder businesses are dying with no way out. TheCaveman
  • Score: 6

5:42pm Tue 15 Apr 14

TheCaveman says...

By the way, "it's not the councils fault" - the government neatly avoided taking the blame for rates on empty shops by giving councils the choice as to whether to charge it or not - now that's just a no-brainer, innit?
By the way, "it's not the councils fault" - the government neatly avoided taking the blame for rates on empty shops by giving councils the choice as to whether to charge it or not - now that's just a no-brainer, innit? TheCaveman
  • Score: 4

6:34pm Tue 15 Apr 14

TheReality says...

At an average of 1000 pounds a month rent is the real problem on bank street. All the figures quoted in the story above are NOT per month either! Either LT has it wrong or hasn't made it clear that there must be arrears involved. I do agree however that local and national government should be looking at the rates but not so that the extra cash can go it to greedy landlords pockets who are crippling the town with rent that is 3 times that of waterfoot shops. Even nu-shoe that tiny shop was up for 800 quid a month rent.
At an average of 1000 pounds a month rent is the real problem on bank street. All the figures quoted in the story above are NOT per month either! Either LT has it wrong or hasn't made it clear that there must be arrears involved. I do agree however that local and national government should be looking at the rates but not so that the extra cash can go it to greedy landlords pockets who are crippling the town with rent that is 3 times that of waterfoot shops. Even nu-shoe that tiny shop was up for 800 quid a month rent. TheReality
  • Score: 8

6:49pm Tue 15 Apr 14

Legal Beagle says...

Business rates are a terrible burden to an already struggling High Street, and local authorities have almost no discretion as to how much to charge.

It's about time that capital gains tax was charged on residential property and the revenue used to reduce or even eliminate business rates. That way people in London and similar places who are making hundreds of thousands of pounds tax free for doing absolutely nothing would for once contribute to productive businesses. It would also serve to make residential property a less attractive investment, thereby reducing demand and making it more affordable.
Business rates are a terrible burden to an already struggling High Street, and local authorities have almost no discretion as to how much to charge. It's about time that capital gains tax was charged on residential property and the revenue used to reduce or even eliminate business rates. That way people in London and similar places who are making hundreds of thousands of pounds tax free for doing absolutely nothing would for once contribute to productive businesses. It would also serve to make residential property a less attractive investment, thereby reducing demand and making it more affordable. Legal Beagle
  • Score: 3

10:11pm Tue 15 Apr 14

TheCaveman says...

I wonder if Legal Beagle is a homeowner? - Capital gains tax on residential - how about the case of a young couple who bought a wreck of a house years ago, have spent a fortune not just in money but time and effort improving the home and it's value - only to see the rewards for their efforts taken off them? Isn't there plenty of run down, dilapidated property already?

Don't forget the Government would be unlikely to give allowances for reductions in value, it would almost certainly be a one-way street.
I wonder if Legal Beagle is a homeowner? - Capital gains tax on residential - how about the case of a young couple who bought a wreck of a house years ago, have spent a fortune not just in money but time and effort improving the home and it's value - only to see the rewards for their efforts taken off them? Isn't there plenty of run down, dilapidated property already? Don't forget the Government would be unlikely to give allowances for reductions in value, it would almost certainly be a one-way street. TheCaveman
  • Score: 4

6:21pm Thu 17 Apr 14

boynesider says...

this needs looking at by the government as the business rates take no account of turnover.e.g a company such as Burberry assessed the same as a small retailer.no wonder the "high st" is dying.if the figures in the article are correct the Deli has to find £96,000 per annum in rent and rates before paying wages and utility bills ?how could it survive?
this needs looking at by the government as the business rates take no account of turnover.e.g a company such as Burberry assessed the same as a small retailer.no wonder the "high st" is dying.if the figures in the article are correct the Deli has to find £96,000 per annum in rent and rates before paying wages and utility bills ?how could it survive? boynesider
  • Score: 1

9:09pm Thu 17 Apr 14

Legal Beagle says...

"... how about the case of a young couple who bought a wreck of a house years ago, have spent a fortune not just in money but time and effort improving the home and it's value - only to see the rewards for their efforts taken off them?"

You obviously have no knowledge of how capital gains tax works. This is hardly surprising, as it's not a tax that affects ordinary people.

CGT is applied only to the profit, so that any expenditure by the young couple in your example would be offset against the capital gain. So if they bought for £100k, spent £60k on improvements and sold for £200k they would only be taxed on £40k.

Furthermore, the rate of CGT is only 18% to 28% depending on the amount of the gain, so it's hardly extortionate.

The problem is that housing is a completely unproductive asset, yet under our tax system it's far and away the best investment. This needs to change, so that housing is seen as somewhere to live rather than a speculative investment.

"Don't forget the Government would be unlikely to give allowances for reductions in value, it would almost certainly be a one-way street."

Again, this demonstrates your lack of understanding. Under the prsent rules losses are fully offsettable against gains, and I would take this one step further by allowing them to be offsettable against income as well.
"... how about the case of a young couple who bought a wreck of a house years ago, have spent a fortune not just in money but time and effort improving the home and it's value - only to see the rewards for their efforts taken off them?" You obviously have no knowledge of how capital gains tax works. This is hardly surprising, as it's not a tax that affects ordinary people. CGT is applied only to the profit, so that any expenditure by the young couple in your example would be offset against the capital gain. So if they bought for £100k, spent £60k on improvements and sold for £200k they would only be taxed on £40k. Furthermore, the rate of CGT is only 18% to 28% depending on the amount of the gain, so it's hardly extortionate. The problem is that housing is a completely unproductive asset, yet under our tax system it's far and away the best investment. This needs to change, so that housing is seen as somewhere to live rather than a speculative investment. "Don't forget the Government would be unlikely to give allowances for reductions in value, it would almost certainly be a one-way street." Again, this demonstrates your lack of understanding. Under the prsent rules losses are fully offsettable against gains, and I would take this one step further by allowing them to be offsettable against income as well. Legal Beagle
  • Score: 1

9:44pm Thu 17 Apr 14

TheCaveman says...

How patronising - I've built up and sold three companies and I'm on my fourth, as well as having been active in property dealing and management for many years. Hands up everybody who thinks the government would properly take into account the couples own labour, compensation for disruption, compensation for risk - basic economics, the reward for risk is profit. As far as allowances for losses, most people will know as one example that gains on shares are taxed - but losses are not an allowable deduction. Again, hands up everyone who thinks the government won't use the same principles for cgt on property gains?

This would plainly, once again, be dragging down the diligent grafters of this world while the indigent lounge about.

Before we get too far off topic, this 'rob the rich' attitude is no way to support businesses - they have a choice as to whether they want to pay the rent or not, they have a choice to relocate to a cheaper location, they have the choice to throw in the towel - and this is what is happening as evidenced by our vacant shops blighting areas everywhere. Subsidising rents or rates with 'government' money (OUR money !) will only give the landlords/councils room to inflate them even more. It's a daft idea. Governments throughout the world that have implemented tax on estate values (often referred to as land value taxes) have rapidly discovered that this dissuades owners from doing improvements.
How patronising - I've built up and sold three companies and I'm on my fourth, as well as having been active in property dealing and management for many years. Hands up everybody who thinks the government would properly take into account the couples own labour, compensation for disruption, compensation for risk - basic economics, the reward for risk is profit. As far as allowances for losses, most people will know as one example that gains on shares are taxed - but losses are not an allowable deduction. Again, hands up everyone who thinks the government won't use the same principles for cgt on property gains? This would plainly, once again, be dragging down the diligent grafters of this world while the indigent lounge about. Before we get too far off topic, this 'rob the rich' attitude is no way to support businesses - they have a choice as to whether they want to pay the rent or not, they have a choice to relocate to a cheaper location, they have the choice to throw in the towel - and this is what is happening as evidenced by our vacant shops blighting areas everywhere. Subsidising rents or rates with 'government' money (OUR money !) will only give the landlords/councils room to inflate them even more. It's a daft idea. Governments throughout the world that have implemented tax on estate values (often referred to as land value taxes) have rapidly discovered that this dissuades owners from doing improvements. TheCaveman
  • Score: 0

9:30am Fri 18 Apr 14

Loving lances says...

The council's plans for a new shopping centre won't help.
Look at Chester. It is a mix of local and national shops all offering Quality. Not overpriced tatty rubbish.
The council's plans for a new shopping centre won't help. Look at Chester. It is a mix of local and national shops all offering Quality. Not overpriced tatty rubbish. Loving lances
  • Score: 0

7:40am Sun 20 Apr 14

hobnobb says...

boynesider wrote:
this needs looking at by the government as the business rates take no account of turnover.e.g a company such as Burberry assessed the same as a small retailer.no wonder the "high st" is dying.if the figures in the article are correct the Deli has to find £96,000 per annum in rent and rates before paying wages and utility bills ?how could it survive?
The rent figure on this story is a printing error! Blatantly obvious ....
[quote][p][bold]boynesider[/bold] wrote: this needs looking at by the government as the business rates take no account of turnover.e.g a company such as Burberry assessed the same as a small retailer.no wonder the "high st" is dying.if the figures in the article are correct the Deli has to find £96,000 per annum in rent and rates before paying wages and utility bills ?how could it survive?[/p][/quote]The rent figure on this story is a printing error! Blatantly obvious .... hobnobb
  • Score: 3

7:46am Sun 20 Apr 14

hobnobb says...

boynesider wrote:
this needs looking at by the government as the business rates take no account of turnover.e.g a company such as Burberry assessed the same as a small retailer.no wonder the "high st" is dying.if the figures in the article are correct the Deli has to find £96,000 per annum in rent and rates before paying wages and utility bills ?how could it survive?
I believe the rent amount was mis-quoted that is obviously the annual figure! And no-one has corrected it ! But I do believe rents these days are sky high anyway! But anyway it will now backfire , the landlord will now be responsible for the business rates on the premises whilst the property is empty.....
[quote][p][bold]boynesider[/bold] wrote: this needs looking at by the government as the business rates take no account of turnover.e.g a company such as Burberry assessed the same as a small retailer.no wonder the "high st" is dying.if the figures in the article are correct the Deli has to find £96,000 per annum in rent and rates before paying wages and utility bills ?how could it survive?[/p][/quote]I believe the rent amount was mis-quoted that is obviously the annual figure! And no-one has corrected it ! But I do believe rents these days are sky high anyway! But anyway it will now backfire , the landlord will now be responsible for the business rates on the premises whilst the property is empty..... hobnobb
  • Score: 2

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