Suffolk hotelier gives hope to companies struggling with high business rates by winning landmark case
PUBLISHED: 22:08 11 February 2019 | UPDATED: 22:14 11 February 2019
The owner of a leading Suffolk hotel and restaurant group has won a landmark case in his battle against excessive business rates.
Paul Milsom whose family business operates The Pier in Harwich, Maison Talbooth, Le Talbooth and Milsoms in Dedham, and Kesgrave Hall in Ipswich, felt physically sick when he first discovered a sharp rise in his rates for the Pier, a restaurant, hotel and bar on the quayside in Harwich.
“Our group rateable value had risen by £250,000 which was a 55% overnight increase,” he said.
“For a reason unknown to me, the Pier changed from being classified as a ‘hotel’ to ‘licensed property’, as with a pub, and that gave it a much higher rateable value.”
“The worst aspect of it was that I didn’t realise until 2016, so although they have accepted that they were wrong, because it was a late appeal, we were only able to claim the money back to 2015. I’m not complaining, but it’s annoying.
“However, winning this argument with the Pier is very important for our rates position going forwards.”
Mr Milsom describes the win as a huge weight off his shoulders. “The business is now on safer footing. The way the Pier was treated jeopardised its future, but this will help. We will weather the storm.
“But the scandal is that for businesses smaller than ours, this could put them out of business.
“It makes people think they can’t go on anymore because it can take three to four years before the appeal is heard. In many cases, it’s easier to give up the fight and just fold up the business.”
Mr Milsom still needs to go through the appeals process to reduce his current bill for the Pier, which currently has a rateable value of £160,000.
“We are now effectively fighting a 100% increase in the Pier’s rateable value, from the newly agreed figure of £81,000 to the 2017 figure of £160,000,” he explained. “The fact we won at a tribunal doesn’t automatically mean our rates going forward will be dealt with in the same manner, which has to be crazy. Does this mean the Pier is now a pub again? Basically there is no one at the rates office able to take a decision and enable us all to move on.”
And even then his fight over business rates is far from over, as he has another four battles to go on the classification of his other properties too.
Mr Milsom claims that his is a landmark case, with implications for a number of other hotels up and down the country that have also been moved out from the hotel into the pub rateable category.
“There’s a difference between a pub with rooms and a hotel - That was the thrust of our case,” he explained.
“The Pier Hotel in Gorleston was used as an example against me. But now they know that I won, they can go to the rates office and say they want to be dealt with the same as the Pier in Harwich was dealt with.
“At no point did anyone from the rates office discuss this matter with me, and we could have sorted it out, if they had. I hope they see sense and get heads around the table dealing with this problem.”
Aside from business rates, there are also other troubles on the horizon for the hospitality sector in the form of Brexit.
“It will be difficult for the industry as a whole,” Mr Milsom said. “London will be badly hit. There are restaurant closures at the moment because of high rates and rents, but what people fail to realise is that if after Brexit you don’t have the staff, you will have to close.
“People are already being turned away from some restaurants because they can only serve 30 people, even though the restaurant might be big enough for 60 covers.”
Mr Milsom claims that the huge growth of hospitality over the last 20 years has been built on all the people coming from overseas, who are willing to work in restaurants to learn English. “It’s a fallacy that foreign restaurant workers want to stay in the UK - they want to go home afterwards,” he said.
“Our industry needs a lot of young people every year and this won’t come solely from the UK, particularly as so many young people in this country see working in our industry as beneath them or only a short term way of earning money before they do something else to do. Wages rates of course play a part but personally I think they are not the main issue.
“Our young people don’t want to do the job. The government don’t understand the huge staff turnover in our industry that no other industry has - it’s staggering. Many of the staff are students, who do restaurant jobs for four or five months, then they move on. We lose people not because they’re going to another restaurant, but because they go on to a different career.”