Business rates revaluation leaves Harrogate family firm fearing closure after 50 years trading

A long-standing family business in Harrogate has expressed fear of closure as recent changes to business rates will see their total outgoings increase by nearly £3,000.

By The Newsroom
Thursday, 23rd February 2017, 11:53 am
Updated Wednesday, 1st March 2017, 8:39 am
Concerned business owners Michaela and Ben Stothard with their dog Bronson. Picture: Adrian Murray
Concerned business owners Michaela and Ben Stothard with their dog Bronson. Picture: Adrian Murray

The Stothard family, who own both Posh Paws on Leeds Road and Stothard’s Pet Store on Commercial Street, have been in the pet trade since 1968.

But now the third generation of owners in the family have raised concerns that the government’s recent revaluation in business rates could mean retraction or even closure within their business.

Business rates were last reviewed seven years ago, but the latest valuation will mean an increase in outgoings of £2,901 across both Stothard-owned stores.

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Michaela Stothard, who runs Posh Paws, said: “In the coming months we are preparing to be hit hard by the increased business rates amongst other rising costs that are already having a negative impact on our survival as a business.

“For us the ending result will be retraction or closing. We can’t pass all these costs on to consumers because we wouldn’t have any customer base left.”

The family have calculated that the revaluation will see nearly a 25 per cent increase in the rateable value of Posh Paws and nearly 15 per cent in the case of Stothard’s Pet Store.

As a result their business rates will increase from £8,591 to £9,858 and £16,773 to £18,407 in the respective stores.

But Harrogate and Knaresborough MP, Andrew Jones, defended the revaluation, explaining it was a positive thing for many businesses in the constituency.

He said: “Nationally, we will see the biggest ever cut in business rates. Other changes to business rates mean that over 600,000 small businesses will stop paying rates altogether.

“Here in Harrogate and Knaresborough we are actually seeing business rates go down - the average decrease in business rates is 4.3 per cent.

“This is good news as it means the vast majority of local businesses will not see increases in their rates.”

However Mr Jones accepted that the percentage decrease across the two towns was an average and that some businesses would see an increase in their rates.

The problem for the Stothard family business, Michaela explained, was down to a number of increased outgoings which has been compounded by the rising rates.

She said: “As a small business we are being hit by so many increased overheads such as, the increasing living wage, the new pension contribution system, rent increases, rising business rates, all on top of prices being increased from suppliers.

“We have had six price increases so far since January, six different companies we buy from have increased their prices.

“There’s so many factors that are suffocating us as a business. The future for small businesses isn’t looking great, it’s frightening.”

For Michaela’s brother Ben, who runs Stothard’s Pet Store, the revaluation was a ‘double whammy’ and has prevented the family from making further investments in the shops.

Ben said: “It’s a double whammy, as soon as you are charged more rent you get higher rates because your rateable value has increased.

“Anything you do in your shop as an improvement adds to your rateable value.”

Michaela added: “There’s no heating or air con in Posh Paws and we would love to put it in but it’s the cost of it and it will increase the rateable value.”

While Ben and Michaela discussed the financial impact on their shops, which support four households, they also highlighted there was great sentimental investment in the family business.

Ben said: “Our grandparents find it tragic, there’s been blood sweat and tears, it used to be the more you put in the more you get out.

“Being in the pet trade you build up a knowledge that you pass on and there’s more of a community feel in our shop.

“People need to realise that these are the pressures high street shops, particularly small independent businesses, are under so we want to make them aware that without their support we won’t survive. Use us or lose us.”

The Harrogate Advertiser Series has run a long-standing campaign to Love Our Indies, encouraging readers to shop locally wherever possible within the district.

While Mr Jones defended the rates revaluation, he expressed his support for the campaign and invited businesses to contact him if they felt their revaluation is unfair.

“Rate revaluations of any kind are always difficult. They are however a legal requirement and are not carried out by local councils or by the Government but by the independent Valuation Office Agency.

“This prevents business rates being used as a cash cow. Instead they are determined by an organisation that does not have a remit to raise additional cash for the Exchequer.

“There is an appeals procedure and businesses have been consulted on the structure of that process which will be published shortly.

“Over the last few years we have seen corporation tax significantly reduced – businesses are able to keep more of the cash they make to reinvest and grow.

“Many small businesses in Harrogate and Knaresborough no longer pay national insurance contributions for their staff.

“That is why over recent years we have seen overall unemployment in our area reach record low levels with youth unemployment nearly eliminated altogether.

“None of this means we should ever stand still in our support for business and my job locally is to speak out for business.

“That is why I support the Advertiser campaign to back our local shops and encourage people to shop in them.

“Our small independent traders give our area a distinctive feel and are part of that unique offer of our town centres.

“I am also inviting businesses to contact me if they feel their revaluation is unfair and I will do what I can to help through the appeals process.”