UK ports revolt on crippling backdated rates charges

The new rating system paid directly to the Government Valuation Office Agency (VOA) and backdated to April 2005, has landed unexpected bills, some of which run into millions of pounds, on the desks of UK port businesses. The first reported casualty, paper and pulp distribution specialist Fortress Warehousing & Distribution Ltd, formerly the UK arm of the international Westerlund Group based at Tilbury Docks, went into receivership after being hit with an unexpected bill for £2.4m.

Ken Kirk, managing director of port operations company, Stanton Grove, which turns over £7m and employs 50 people at Seaforth, said: “The delay by the VOA in implementing these plans means that some businesses are likely to receive rates demands that are higher than their annual turnover. There is no reasonable way that people could plan for these retrospective bills and they should be scrapped.”

In the past, business rates were paid by the various port authorities and re-charged to occupiers through annual port dues. The VOA, part of the UK HM Revenue and Customs, began the revaluation of the nation’s ports in May 2006, and due to the length of time taken to introduce the new system, current bills are being backdated to 2005, meaning that some businesses can expect increases of as much as 250%.

While the changes have so far only been implemented in only a few ports across the country, including Tilbury, Hull and Southampton, Mersey and Humber maritime businesses are already fighting back.

Mersey Dock Rating Group, a campaign group set up to lobby for a change to the legislation, predicts that Mersey businesses worth up to £400m are under threat of becoming insolvent, with the potential loss of 3,000 direct jobs and thousands more in hired labour. The national figures are even more alarming with business leaders predicting the potential loss of businesses worth up to £20bn and job losses of over 150,000.

Kieran Hall, managing director of Birkenhead-based Denholm Handling, said: “We are just one of 70 businesses affected, which shows the potential ripple effect on the local economy from these demands. I have spoken to several established companies which believe they may have no option but to close.”

The revision could not have come at a worse time for the national economy. John Webber, joint head of Accurates – the specialist rating division of Colliers CRE in Birmingham, believes the knock from this new rating system will “fuel the country’s recession harder and faster, inflating the price of goods coming into ports”.