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Cargo Handling Company Nw Trading Shaken By Backdated Rates Bill

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http://www.telegraph.co.uk/finance/newsbys...rates-bill.html

His cargo-handling company is one of hundreds of businesses operating in Britain's ports that have been sent reeling by a bungling Government agency. Jobs are going, businesses are closing down and investment is grinding to a halt – not because of the recession, but due to the Valuation Office Agency (VOA), an offshoot of HM Revenue & Customs.

Without consultation, the VOA has landed 600 port companies with rates bills controversially backdated to April 1 2005 that are estimated to total £50m-£75m – a monster sum for an industry already struggling to keep its head above water.

The reason? Quite simply that the VOA has belatedly worked out that it got its previous ratings wrong and, citing its statutory duties, has decided that there is no time quite like a recession to put that right.

Having poked around the Port of Southampton in 2006, the VOA found that one port company occupied much more property than it previously realised. It instigated a review of all 55 UK ports – and, lo and behold, 600 businesses have now been added to the 1,670 it previously rated.

Then it stung them with bills, backdated to 2005 – the latest rating date in five-yearly assessments. None of the businesses could have foreseen what was coming, so had no chance to pass on the extra costs to their customers.

Neither did the VOA even consult them. Which may explain why it has been inundated with hundreds of appeals from the freshly-rated new companies, outraged at the size of their bills.

Which brings us back to Woolrich. His two small businesses in the Port of Goole on the Humber have received a backdated bill of just under £1m and an ongoing liability of £350,000 a year – somewhat hefty for businesses with a joint annual turnover of just £2.5m.

Over at Birkenhead, his Mersey business is getting a retrospective bill of around £2m and an ongoing liability of £500,000 a year. That for a business with annual sales of £7.5m.

The situation has been repeated up and down the country, with port companies being advised by accountants that putting such liabilities through the books would leave them technically insolvent.

As far as David Tretton, the VOA director of rating, is concerned, he is only doing his job. "Valuation officers are required by statute to maintain accurate rating lists," he explains. "Where we found assessments were incorrect, we had no option but to correct them."

For the port companies, that is bureaucracy gone mad. Aghast at the ostrich-like demeanour of both the VOA and the Government, Woolrich wrote last November to the Business Secretary Lord Mandelson.

"I feel quite frustrated at the lack of understanding there continues to be regarding this very serious matter by both Government ministers and the VOA officials advising them," he says. Woolrich might have expected a sympathetic ear. Weeks earlier, his lordship had penned a piece for The Sun newspaper that began: "People running Britain's small businesses are the lifeblood of our economy. They are vital to pulling Britain out of the current difficulties."

Few more so, in fact, than port companies – the link between an island nation and its trading partners. The industry employs 73,500 people directly, a further 47,000 indirectly and handles 95pc of Britain's international trade.

Labour supporting business to the bitter end.

The govt needs the tax revenue.

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This has been ongoing for the last 18 months, an absolute disgrace considering companies have already paid their rates for this period. As always the government give all these already struggling companies one last kick in the balls whilst they can, it's going to cause absolute carnage (especially in the Humber) if they demand the back dated rates for seemingly their own mistakes.

Cheers Gordon

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As far as David Tretton, the VOA director of rating, is concerned, he is only doing his job. "Valuation officers are required by statute to maintain accurate rating lists," he explains. "Where we found assessments were incorrect, we had no option but to correct them."

In which case, they obviously weren't doing their jobs properly in the first place. The Crown should consider what charges can be brought against Tretton and his staff for their negligence.

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From what I understand all companies which are based on the dock have always paid an agreed lower business rate directly to ABP which own the estates across the country, this has been the case for years but the VOA have decided to back date the full charges from 2005 (as in the article) without consulting any businesses or looked at the impact it'll have.

What I can't understand is why the VOA don't notify companies presently on the dock that the new rates will apply from the next tax year onwards rather than back date charges that no one was aware about...then again I suppose the money from the bail outs has to be paid some how.

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In which case, they obviously weren't doing their jobs properly in the first place. The Crown should consider what charges can be brought against Tretton and his staff for their negligence.

Maybe they should be forced to repay the difference between social security and their salary? I mean, they were clearly not doing the job that they were paid for.

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Having poked around the Port of Southampton in 2006, the VOA found that one port company occupied much more property than it previously realised. It instigated a review of all 55 UK ports – and, lo and behold, 600 businesses have now been added to the 1,670 it previously rated.

Just to play devil's advocate for a second...

Let's get this straight. So 600 businesses that weren't paying any business rates, kept their gobs shut about it in the hope they'd continue to get away with it forever? And now they've been found out and hit with backdated bills, they're squealing and bellyaching about how they can't afford it? This despite the fact they've probably been getting away with it for a lot longer than the 5 years they're being asked to pay for? Does that about cover it?

And to anyone that wants to make this a political issue, please don't tell me you seriously believe this sort of thing could never happen under the tenure of the Tories. They are after all the party of cost cutting. Cost cutting leads to corner cutting. Corner cutting leads to even more mistakes.

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In which case, they obviously weren't doing their jobs properly in the first place. The Crown should consider what charges can be brought against Tretton and his staff for their negligence.

How is a small government department supposed to police what every business in the UK is up to with their property on a day to day basis? If value significant physical changes are made, someone is going to have to tell them about it so they can be accounted for. Otherwise, they might not be picked up until maybe years later while dealing with something completely unrelated. I'm sure there's lots of things they'd like to do to keep on top of things, but resources in the public sector aren't exactly a bottomless pit nowadays. Or at least not for important stuff like this.

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How is a small government department supposed to police what every business in the UK is up to with their property on a day to day basis? If value significant physical changes are made, someone is going to have to tell them about it so they can be accounted for. Otherwise, they might not be picked up until maybe years later while dealing with something completely unrelated. I'm sure there's lots of things they'd like to do to keep on top of things, but resources in the public sector aren't exactly a bottomless pit nowadays. Or at least not for important stuff like this.

You're erroneously assuming that ratings valuations are some sort of exact science. The VO representative's statement also suggests this.

They are nothing but arbitrary and vary enormously from identical property to identical property depending on the occupier's use and data available. Freeholds typically pay less rates due to the absence of rental evidence. The VO's data collection operation is also an extraordinarily hit and miss affair.

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From what I understand all companies which are based on the dock have always paid an agreed lower business rate directly to ABP which own the estates across the country, this has been the case for years but the VOA have decided to back date the full charges from 2005 (as in the article) without consulting any businesses or looked at the impact it'll have.

What I can't understand is why the VOA don't notify companies presently on the dock that the new rates will apply from the next tax year onwards rather than back date charges that no one was aware about...then again I suppose the money from the bail outs has to be paid some how.

Just to clarify here for anyone not in the know, the VOA would not be back dating any charges as such. Billing is done by councils. The VOA just values things, and what they will be saying is that a business existed in premises of a particular value at a particular date, and it's then up to the councils to decide who pays what and when. So if the councils decide to use their discretion to write off the debts, that's up to them. The VOA has no say in that.

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The VOA isn't a small government department and all local authorities have their own rate collection departments.

In this case 600 innocent companies have been paying what they were told they owed for the last five years. Business rate is a piece of pi$$ to pay- the council send you a nice little bill in the post and you pay the amount printed on the paper.

How can it be right in any sense for these 600 companies to be expected to pay vastly inflated and backdated bills when the rateable value was correct at the time they paid? If the rate value was wrong how were these companies supposed to know? Their are an army of civil servants who get paid to send out bills- if they can#t be @rsed to do they job properly then take the shortfall from them- perhaps it will spur them on to be less sloppy in th future.

A LOT of these companies will be small family operations and people could be made bankrupt because of this.

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Wealth transfer? Hidden hand at work?

Perhaps someone is already lined up to pick up all the pieces when all these companies have gone bust - FOR PENNIES IN THE POUND.

RUBS HANDS

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You're erroneously assuming that ratings valuations are some sort of exact science. The VO representative's statement also suggests this.

They are nothing but arbitrary and vary enormously from identical property to identical property depending on the occupier's use and data available. Freeholds typically pay less rates due to the absence of rental evidence. The VO's data collection operation is also an extraordinarily hit and miss affair.

Yes indeed, the valuing of anything is always a matter of opinion. But that probably wouldn't work by itself as a parameter for tax distribution. There needs to be mathematics behind it too, so even properties of which there is no individual opinion of value can still be valued. This is done via a survey of each property being taken and maintained, and then values (via the analysis of rental evidence) applied to each physical aspect of that survey. Therefore, if the survey changes, then so does the VOAs opinion of its value.

Okay, granted, I am assuming that's what the issue was here. Physical changes not previously accounted for, now found and being applied. I certainly wouldn't expect the press to have access to the full behind the scenes story. And nor do I think they'd be interested anyway if it gets in the way of a sensational politically motivated story.

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The VOA isn't a small government department and all local authorities have their own rate collection departments.

It is in the grand scheme of government departments.

In this case 600 innocent companies have been paying what they were told they owed for the last five years. Business rate is a piece of pi$$ to pay- the council send you a nice little bill in the post and you pay the amount printed on the paper.

How can it be right in any sense for these 600 companies to be expected to pay vastly inflated and backdated bills when the rateable value was correct at the time they paid? If the rate value was wrong how were these companies supposed to know? Their are an army of civil servants who get paid to send out bills- if they can#t be @rsed to do they job properly then take the shortfall from them- perhaps it will spur them on to be less sloppy in th future.

A LOT of these companies will be small family operations and people could be made bankrupt because of this.

This story seemed to indicate that these 600 businesses weren't rated at all until just now. They weren't paying any rates! So I question, surely they knew they should have been? So why didn't they contact their council and request a bill? I think we all know the answer to that one.

The VOA do have rules about back dating. If these are indeed businesses that have never been rated before, then their valuations can be back dated to the start of the current rating list, i.e. April 2005. If however this was a case of businesses already rated now being upwardly re-valued, then it would only be able to be back dated if the reason for that increase happened within the current rating list, e.g. a recent extension. If however this reason was prior to that date - e.g. it's always been incorrectly valued - then it cannot be back dated at all.

That's what makes me believe these are far from innocent victims. They kept their gobs shut in the hope they'll get away without paying any rates. And I'm sorry, but if that's the case, I have no sympathy with them. Other businesses have to pay their rates; why shouldn't they?

Edited by Dark 1

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It is in the grand scheme of government departments.

This story seemed to indicate that these 600 businesses weren't rated at all until just now. They weren't paying any rates! So I question, surely they knew they should have been? So why didn't they contact their council and request a bill? I think we all know the answer to that one.

The VOA do have rules about back dating. If these are indeed businesses that have never been rated before, then their valuations can be back dated to the start of the current rating list, i.e. April 2005. If however this was a case of businesses already rated now being upwardly re-valued, then it would only be able to be back dated if the reason for that increase happened within the current rating list, e.g. a recent extension. If however this reason was prior to that date - e.g. it's always been incorrectly valued - then it cannot be back dated at all.

That's what makes me believe these are far from innocent victims. They kept their gobs shut in the hope they'll get away without paying any rates. And I'm sorry, but if that's the case, I have no sympathy with them. Other businesses have to pay their rates; why shouldn't they?

As you've correctly stated earlier, councils issue bills based on data submitted to them by the VO. Frankly, even if you did ring either informing them you aren't being charged you'll more than likely be met with a 'computer says no' response. Many councils have outsourced their NDR functions to private sector call-centre providers and with several it's entirely impossible to make contact with any sentient being who understands NDR.

Agencies of the government have plenty of form in refusing money from people who tell them they owe it only then to uncover the mistake themselves later and come knocking for the money, they've previously told you isn't owed.

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