Welsh Government asked to help delay business rate rise

Traders in Monmouth have complained about the rises in their business rates from April 2017

Businesses fearing they could fold because of "enormous" business rate hikes have asked the Welsh Government to delay them.

Monmouthshire council's deputy leader Bob Greenland wants the 2017 rates to be "investigated thoroughly" as firms in the county face up to 650% rises.

He has written to First Minister Carwyn Jones and Finance Minster Mark Drakeford for their intervention.

The Welsh Government said the Valuation Office Agency carried out revaluations.

It added it was offering a £10m transitional relief scheme when the new fees come into effect on 1 April and is in addition to the £100m Small Business Rates Relief.

Business rates all over Wales and England were re-calculated with the tariffs based primarily on how much a property would cost to rent.

It was last calculated in 2010 based on 2008 prices. The new rate is based on 2015 prices.

Business owners in rural parts of Wales have said they are under threat over what they claim are unfair business rate rises.

The licensee of the Woodlands Tavern pub in Llanvair Discoed is facing a 650% rate rise

Mr Greenland said: "I am building the case with evidence of why this is wrong."

Monmouth's chamber of trade have also called for an investigation.

Keith Gibbs, licensee of the Woodlands Tavern pub in Llanvair Discoed, Monmouthshire, for 20 years, claims his business is facing a rate rise of 650% to £12,000 a year.

"We are just a nice rural pub plodding along," said Mr Gibbs, who employs four full and 10 part-time staff.

"I'm not sure how we would cope with such a rise. I understand rates may go up but not this much. It is a worry."

The first minister has previously acknowledged "there is an issue" for businesses in Monmouth and Cowbridge.

Mr Greenland insisted Monmouthshire council is "fighting" for businesses such the Woodland Tavern who say they are facing a threat to their existence.

"I have asked the Welsh Government to rate businesses next year on the basis on this year's valuation," he said.

Monmouthshire's deputy leader Bob Greenland has written to the Welsh Government calling for rate relief collection for 2017 to be delayed

"That doesn't mean the Welsh Government will get a penny less than it would otherwise get.

"What it means is some of these enormous rate increases will not become payable until we have had a chance to see whether this revaluation has been fair to all rate payers."

He added: "Overall rateable values in Wales have gone down and in Monmouthshire, for some unknown reason, they are showing a 11% increase while Cardiff is showing a 5% decrease. It doesn't make sense.

"The problem is once we get to 1 April, they will become payable and if nothing is done businesses could actually fold with cash flow issues.

"It's no good a year down the line saying 'oh sorry we made a mistake'. If that business has gone, it has gone."

A Welsh Government spokesman said: "Our focus is to help those sectors and businesses whose rates are going to rise and those who may struggle to pay because their eligibility for small business rate relief is going to be affected.

"That's why we have announced a £10m transitional relief scheme, which will be available from 1 April 2017 when revaluation comes into effect."

How business rates work

Despite the devolution of business rates, the way they are implemented is complicated.

Business rates contribute to the overall funding of councils, and it is councils that collect the cash.

But councils cannot then spend the money themselves. They have to pass it on to the Welsh Government, which uses a formula to issue the cash back out to the local authorities.

The rates are set through a system which takes the rateable value of a property which is multiplied it by a value set by the Welsh Government every year.

It is the rateable values - based on property valuations made by an independent agency - which has proved controversial.