I don’t rate business rates

It is a truth universally acknowledged, that a business in possession of a premises must be in want of customers and an extra few bills to pay.

Every property in the land pays rates of some description, which is fair enough because there are a lot of things to pay for! Except…we still have to pay for lots of other things that the average household gets included in their lot. I can’ t necessarily speak for industries other than my own with any authority…so I won’t. What I can say however is, bars are getting screwed.

The general position is that rates pay for, well everything, from teaching to waste management, but what precisely does it provide for me… Of late, there seems to be quite a furore in RoI about water charges…I pay them already. Every bar does, restaurants too. Businesses in general I believe. But I pay thousands each year to NI Water… If a pipe coming into a business is between 41mm & 50mm, i must pay £624 just for the privilege of wanting to have water readily available, and £1.02 per m3 of water actually supplied to me. So…I pay rates, and I pay for water…and water is an absolute necessity, both for food and for bar service, all those people who try to save a couple of quid, come out only for a special price bonus meal deal early bird type thing and order water…that water costs us, it ain’t free!

Waste. You normal folk who put your bin out each week, or each fortnight, or each month if you’re from banbridge, or each year if you’re from the not-too-distant future…you don’t know you’re born! For comparisons sake we shall use the council service pricing. When you put your bin out, it costs you nothing, well…nothing more than the council rates you pay…I pay business rates, but also pay for waste collection; your household wheelie bin is 240L, my bins are 1100L, these cost my £15.25 per collection per bin, I have 2 of these and they are collected 3 times per week for a cost of £91.50 each week, or just shy of £5000 a year. Plus Vat. Recycling too, for the same size bin it would cost me £8 (dry product, cardboard, plastic etc), £9 (660L bin – glass…and if you do the maths, this is more expensive than just binning it), £6 (240L – foodstuffs…which is a lot more expensive per L than general waste). I would also then have to have 5 bins, which I don’t have space for, and when I did use them to recycle, frequently a passerby would throw a sandwich wrapper from their lunch in with the glass and the bin would be wrapped in neon-bio-hazard CONTAMINATED alert signs. So I don’t recycle. The council are getting £5k from me each year for waste collection and I just can’t afford to spend even more to recycle.

So I pay rates, waste collection, water…oh, and I subsidise my competition. Part of what rates pay for are council run or planned arts and events. In the bar industry, we tend to know a bit about arts and events, we tend to be a hub for them…but the council sees fit to charge us to pay them to host events, some of them are of course beneficial to our businesses. Some events organised by the council, such as the Christmas market, have a bar. And if you’ve ever been to the Christmas market bars, there are a LOT of people in them, which are customers not in bars from the surrounding area that do pay rates, that support the local economy all year round. Admittedly the Christmas market does bring people into Belfast city centre, but with none of the overheads carried by the local businesses.

“But it’s ok because business rates aren’t that bad are they?” One business owner I know of that has a presence in both Belfast and Dublin, told me that per sq ft they pay 3 times more in Belfast than Dublin. So to compare 3 Belfast city centre bars, and these are all figures sourced from land and property services NI, freely available for all to check out.

The Spaniard -£6215 p/a
The Duke of York – £13831 p/a
Laverys – £85002 p/a

And with the current revaluation process for 2015 indicating the following increases

The Spaniard – +480.39%
The Duke of York – +550.60%
Laverys – +260.74%

What this tells me is that businesses that have been established for some time now and have been the lynchpin of regeneration in some areas, particularly the cathedral quarter, are now being financially penalised for the growth they have encouraged in their neighbourhoods. Thank you very much for making this area attractive to other businesses who will also pay rates, now if you could just accept this increase in rates, oh and pay for your water and your waste. And whilst you’re at it, whilst you may be looking at the accounts ledger and thinking “this could push me close to not breaking even” well then you won’t be able to reap the benefits of a cut in corporation tax, because you have to be profitable to get a tax cut. Now pay your business rates and keep quiet.

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  • Brian O’Neill

    Excellent article BB. Jez that would make you weep.

    It is for this very reason that I confine my business activities to the virtual world. It is fairly clear that the government don’t give a flying feck about small businesses. They just see them as a cash cow to be milked for every penny. All the attention is given to multinationals, even though small businesses are the backbone of our economy.

    All they are doing is causing more businesses to close and more trade to go online. They will not be happy till every city centre is a ghost town of charity shops.

    On the positive side this has inspired me to drink more and do my bit for our local pubs. To my fellow slugger readers I say this to you:

    Ulster/Occupied six counties/the North/Northern Ireland [delete as appropriate] needs you, go forth to your nearest hostelry with some friends and drink!

    But obviously don’t drink and drive and all things in moderation 😉

  • Zeno3

    I would give you some sympathy if some of you weren’t charging £3 quid for a Bottle of Coke mixer. That’s over £40 quid a gallon.

  • Brian O’Neill

    Where you drinking? Most mixers are around £1.50 are they not? BB how much is a mixer in your place?

    BB has some good articles on the economics of the pub trade on his blog:

    https://belfastbarman.wordpress.com/category/hospitality-industry/

  • Belfast Barman(ager)

    Yeah, I’m at £1.55 for coke so yeah, you’re getting fleeced at £3!

  • Belfast Barman(ager)

    But my rates bill which runs well into 5 figures isn’t sufficient contribution to society to cover the waste removal? The Vat paid to the government which is over 6 figures? The employee side of tax as well runs over 6 figures. Some pubs are coping and some aren’t, that’s business. I’m not saying any pity is required, just some level thinking. My call to reduce business rates to benefit all businesses (those making profit and those not) doesn’t just benefit bars.

  • Zeno3

    Europa, unfortunatly.But even ordinary Pubs ate charging £18 a gallon for bottled water. I used to think petrol was expensive.

  • NMS

    BB, Excellent piece. You are completely correct in relation to Dublin. Rates have fallen over the past six years because most elected councillors understood the need to keep costs under control.

    Commercial waste collection has been competitive for many years with a choice of registered service providers.

    The only fly in the ointment is water charges increased once a national tariff was put in place.

    However the cherry on top is of course the 9% VAT rate on food.

    I think you clearly need to get proper councillors elected who understand trade and not flags. The alternative is to emigrate South!

  • Mister_Joe

    “Jez that would make you weep.”
    Well, as my sister-in-law is prone to saying, “Dry your eyes”.

  • Belfast Barman(ager)

    The point of this was not to encourage sympathy for pub owners, it was for fairness for all and for all levels if business to be given consideration when the powers-that-try-to-be begin handing out tax cuts that benefit those making the most. Also I’d like to point out, I’m not a business owner, I’m a manager, I write from passion and experience not because I want more money in my pocket, if I get 1000customers a week or 10000 it matters not to my wage

  • Belfast Barman(ager)

    Living the dream down there!! I managed in Belfast, I can’t imagine how tough it is in border towns… And don’t get me started on the Easter issue!!!!!!

  • patrick23

    Thanks for the article, a useful companion to the corporation tax bit the other day.
    Is it the Receipts and Expenditure Method used to calculate, because it appears to be the most progressive . Might explain why Laverys, which has boomed in recent years, has a much bigger increase than the 33% at the M Club opposite

  • Belfast Barman(ager)

    I believe it’s based loosely around rental values. Which are currently at X price because 10years ago the economy was booming. And rental prices haven’t come down since then because rent doesn’t come down. So it’s a false high. I place I ran during the boom had rent increase in 5 years from 44k p/a to 96k p/a.

  • Metro

    I think we should add the “social enterprisation” of the economy into any debate about rates, or indeed any discussion about business taxes. Why are we all funding charities to compete with us? Why aren’t charities subject to rates like the rest of us, particularly if they are clearly competing with rate paying private businesses?

  • Belfast Barman(ager)

    Can you give an example?

  • patrick23

    Yeah, I assumed it was rent, or property value as the domestic rate is now. The ratings website says pubs aren’t done that way though.
    The press reports say shop rates on royal avenue are significantly decreasing due to their unatrractiveness and consequently falling rents , but pubs in the area are, according to my quick search, not falling by the same amount. Indeed The Hudson which I took as an example, is an enormous increase. The old Virgin Megastore, done on rent, is a huge decrease.
    So I think knowing the basis of the calculation is crucial.

  • patrick23

    But the VAT is effectively paid by the punters, you collect and distribute it rather than pay it. If VAT was rated zero on the products you sell you wouldn’t pay any VAT but you wouldn’t be any better off assuming you sold the same amount.
    It’s also double counting to say you pay both this six figure amount of VAT, and the VAT in the refuse, the latter is presumably offset as an input

  • Metro

    Too many to narrow it down to one example to be honest. Any charity delivering any type of service isn’t paying rates. I wonder if Bryson House pays any rates – or rates to the same extent as the private sector – when it is bidding for services. I wonder if the John Hewitt bar pays rates the same as you?