2018 claims its first high-profile business rates victim
We may be trudging our way reluctantly through January but the first news snippets out in 2018 don’t seem to be that different from 2017, having scanned the initial industry headlines for the new year.
Headlining in the nationals this week is the closure of the iconic Kensington Roof Gardens following a 47% increase in its rateable value. The owners say this made the night spot ‘untenable’.
If true, that marks the end of a 37-year history for the venue which had been run by Richard Branson’s Virgin Group and included a night club and award-winning restaurant; neither of which have I had the pleasure of visiting.
The exclusive Grade II-listed location – also famous for its landscaped gardens complete with pink flamingos apparently – is reported to have seen its RV increase from £402,500 to £590,000. This translates in an additional £86,000 more on its 2017/2018 business rates bill – coming out at £294,410.
Further rises predicted for future years to 2021/22 could also have been another footnote in the decision to close now.
So, if the high end of the entertainment and leisure industry are being killed off by business rate rises then we can only assume the smaller, less glamourous venues are also feeling the pinch.
London was always going to be hit hardest after the postponed business rates revaluation, after benefitting from the status quo beforehand. However, I suspect the new Living Wage and possible difficulty in recruiting and keeping staff after the Brexit vote may well have played their part in its demise. After all, a business of that standing and reputation to be sunk by having to find an extra £86,000 a year would seem quite precarious, regardless. Selling just a few extra bottles of a Moet 1943 Cuvee Dry could have comfortably helped towards the new tax bill.
Bubbly aside, it will be interesting to see if any other big names suffer the same fate this year, or at least use the same excuse to shut up shop.
The Valuation Tribunal has ruled in favour of Voodoo Doll Ltd following an appeal over the valuation method used on the Mojo bar and restaurant in Manchester.
A Tory MP is calling for business rates to be scrapped and replaced by an increase in VAT in order to save high street businesses.
Maximising income and protecting cash flow has never been more important for landlords as the UK battles through the latest stage of the pandemic.