In 2008 the way business rates are calculated was changed. This meant that many port-based companies received large backdated bills, with some charges running to millions of pounds.
The payment freeze announced by Communities Secretary of State Eric Pickles and Local Government Minister Bob Neill offers a respite for ports companies. The government will continue to explore options to offer permanent relief from backdated bills.
Millions of pounds in unexpected bills
Many businesses across the country have faced huge rises in their bills.
- a Liverpool based company faced a 400% increase in its rates bill, with a demand for an extra backdated £2.6 million
- a firm in Grimsby had a rates increase from £48,000, the normal business rate, to £800,000
- a Sheerness based importer’s retrospective rates bill was £3 million
Eric Pickles said:
Backdated port taxes levied on a vital part of Britain’s export industry have left many businesses unfairly facing hefty bills, reaching into the millions in some cases.
Today I am introducing a suspension of the collection of this ports tax grab, offering immediate help to firms struggling because of this unfair, unjust tax.
I will not allow government to idly look on any longer as vital businesses stare into the face of insolvency as a result of the ports tax, and today we’re making good on our promise to act.
We are clear we should be supporting the economy not forcing people out of business.
Local Government Minister Bob Neill added:
It is vital to the nation that we set things right and stop this nonsensical situation affecting the livelihoods of thousands.
This payments freeze is an urgent first step that will mean struggling firms have one less thing to worry about in these difficult times, and we will continue to work towards a sensible and fair long term solution.
The toll of backdated rates
Below are the rateable values for some of England’s major ports areas:
- Hull: £8.56 million for 62 business properties
- Liverpool: £8.4 million for 91 business properties
- Tilbury: £5.25 million for 42 properties
- Sheerness: £4.8 million for 59 business properties
- Goole: £2.7 million for 58 business properties
- Immingham: £6.4 million for 44 properties
- Grimsby: £1.79 million for 17 properties
- Bristol: £849,000 for 7 business properties
- Tyne: £396,000 for 19 properties