The family owners of The Highlands Inn, Uckfield, and The Cock Inn, Ringmer, are shocked by the scale of business rates rises facing them.
Director Ian Ridley says the rateable value is more than quadrupling for The Highlands to £133,000 – and rising to £59,000 for The Cock – with the rates payable, calculated as the uniform business rate multiplied by the rateable value, being around £63,707 and £28,261 respectively based on the suggested UBR for 2017/8.
That is on top of other huge tax payments made by the businesses trading as Ridley Inns.
He says that in the last financial year the two pubs gave employment to 75 people, generated £300,000 in net VAT paid to the Government, paid £65,000 in payroll taxes, will pay £53,000 in corporation tax and already pay £35,000 in business rates.
He has written to Wealden MP Nus Ghani and Lewes MP Maria Caulfield asking them to champion the cause of the SME and bring about a common sense review of the “draconian and damaging increase”.
Mr Ridley tells the MPs that the family business invested heavily in October 2014, with landlord Spirit Leasing, in acquiring and refurbishing in The Highlands.
He says this was previously a failing managed house which had seen a succession of short term managers drive the business into the ground and adds: “Using our reputation from The Cock, we convinced Spirit Leasing that we could turn around this business, providing employment and a much needed venue for the local community.”
Since then they have personally spent more than £300,000 on refurbishing the pub and they are still investing in improvements.
Mr Ridley says the pub was an immediate success and continues to flourish, alongside its sister pub in Ringmer.
He continues saying that over the 11 years they have owned The Cock they had seen a never-ending assault on the traditional English pub from a succession of legislation and “stealth” taxes, which had decimated the industry.
He says in his letters: “The Prime Minister recently talked about making the UK the lowest corporation tax zone in Europe. What empty words these are when you take into account how small businesses are being penalised by employment legislation and by increases in business and personal taxation.
“The risk/reward ratio that encourages entrepreneurs, such as myself, to create employment and wealth in their local communities, is being fast eroded.
“It is about time that Government understood the acorn to oak tree analogy. If the incentive is not there to encourage business founders to create employment and wealth in their communities, how is the country going to survive?
“Forget about Brexit, this is about the fundamental principles of how an economy works.”
Both MPs have acknowledged Mr Ridley’s letters and Maria Caulfield has forwarded a response from the Valuation Office Agency which says that when setting rates for a pub the assumption is made that the business is carried out competently by the publican responding to normal trading practices and competition in the local area.
The physical characteristics of the pub, and the facilities and features of the premises, which would influence trading potential and rental values are taken into consideration.
The Valuation Office says: “I appreciate that Mr Ridley is unhappy with the 2017 draft rateable values for his two businesses but they have been valued in line with the 2017 Approved Guide to the Rating Valuation of Public Houses.
“Mr Ridley can, should he wish, start the process to formally challenge his 2017 rateable value from April 1, 2017.”
Mr Ridley says the response from the ValuationOffice highlights “the arrogance and intransigence of the VoA and the complete disregard for simple business economics”.
He is now waiting to see what pressure the two MPs will put on their colleagues in the House of Commons.
Adam Laraway comments on the Uckfield News Facebook page: “Business should stop paying these outrageous taxes how many could be employed with that money.”
Helen Stapleton says: “To be fair I don’t really think that not paying the rates increase would increase the number of staff? It’s not a logical progression. However, I totally agree it’s outrageous for a family business to be expected to pay a huge increase such as that.”
Linda Forde says: “That’s absolutely outrageous, how do they expect businesses to survive?”
Simon Kane says: “That level of increase is just not acceptable…how can a family business be expected to absorb that…”