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Business

Business rate reform gives the Port of Dover huge cut in rate while Eurotunnel faces huge hike

By: Paul Francis pfrancis@thekmgroup.co.uk

Published: 00:00, 30 March 2017

Updated: 10:03, 30 March 2017

The Port of Dover, which handles about £119 billion of trade each year, has been given the largest cut to its business rates in Kent.

The docks will see a huge reduction in its taxes after its rateable value was reduced to £2.75 million – down from £5.25m.

While it has been given the largest downgrade in the county, the nearby Channel Tunnel operator Eurotunnel faces a huge rise as its value doubles – from £15.4m to £35m.

The Port of Dover

The contrasting fortunes of the two key businesses in the county have raised more questions on whether the business rates system is fit for purpose.

It could also have serious repercussions for the amount of money that both Dover council and Shepway council stand to receive.

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Authorities retain half of all business rates – the commercial version of the council tax – collected in their area.

David Foley, chief executive of Dover District Chamber of Commerce, said: “They have been given a lot of European money to develop the front and the government has decided it wants the port to keep all of it.

“As a country, should we be giving millions to the Port of Dover in various ways and giving them a discount on business rates?”

Alison Parmar, development manager for the Federation of Small Businesses in Kent, said: “Fundamentally the business rates system is broke and it needs fixing.

“It doesn’t work for our economy in the 21st century and doesn’t work for digital businesses. It is based on bricks and mortar and not about what that business is."

The Channel Tunnel

“We have been dealing with a trampoline park where the space needed is massive and they are paying the same business rates as a multinational like Tesco. How can that be fair and encourage businesses to set up and employ people in the local community?”

A government revaluation of commercial properties has seen complaints from many small and medium-sized businesses in the county that they will be penalised by hefty increases they can ill-afford, leading to job cuts and the threat of having to close.

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A government revaluation of commercial properties should have taken place in 2015 but was deferred.

It will mean rates increase in more than 800 towns and villages across the UK, with some firms facing increases of 42%.

The government was forced into a partial U-turn over the revaluation during the Spring Budget as pressure mounted.

Chancellor Philip Hammond. Picture: Adam Gray / SWNS.com

The Chancellor Philip Hammond announced a £300m fund for councils to cushion the impact and said firms losing small business rate relief would not see their bills rise by more than £50 in the first year.

From April, small businesses that occupy properties with a rateable value of £12,000 or less will pay no business rates at all.

Across Kent, data from Kent County Council estimates that the cumulative rateable value for the 48,520 businesses in 2017 would rise 5.9%.

Of these, the total rateable values for the 8,990 offices would see the cumulative total rise 1.2% from £338,177 in 2010 to 351,429 in 2017.

That is lower than for most other parts of the South East but business chiefs say that many smaller businesses have been confronting increases in their bills of between 10% and 50%.

The Port and Channel Tunnel collectively handle almost four million freight vehicles a year, or nearly 11,000 freight vehicles a day.

The Port of Dover declined to comment. But Eurotunnel said it was discussing the issue with the Valuation Office.

A spokesman said: "The rate reevaluation is still under discussion, but it is correct that the rating officer has made an estimate that would lead to a very significant increase over the existing level. We continue to discuss this with a view to reaching a reasonable level of increase.

An earlier version of this article included a quote claiming the Port of Dover is owned by the Government. In fact, the Port of Dover is a trust port, owned and operated as a commercial enterprise by Dover Harbour Board, which is an independent statutory body, governed by its own set of rules and statutes. We apologise for the error and are happy to make the clarification.

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