Port tax concession ' not enough'

THE GOVERNMENT came under fire yesterday for pressing ahead with plans for increased business rate bills for hundreds of firms operating from ports across the country.

THE GOVERNMENT came under fire yesterday for pressing ahead with plans for increased business rate bills for hundreds of firms operating from ports across the country.

New rules from the Valuation Office Agency - part of HM Revenue & Customs - mean that many port tenants which previously paid rates through the rents paid to their landlords will now be billed separately.

Besides a steep increase in some annual charges, the change is also being back-dated to 2005 - leaving many firms, including a number at local ports such as Felixstowe and Harwich, facing unexpected bills for thousands of pounds.

Despite pressure from business lobby groups and the cross-party Treasury Select Committee, the Government announced yesterday - in a written ministerial statement from the Department for Communities and Local Government - that it would go no further than allowing the firms affected more time to pay.


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As previously indicated by the Government, businesses will be allowed to pay-off the back-dated element of their bills over the next eight years - but the concession was dismissed yesterday by the Conservatives as inadequate.

The party warned that the deferred liabilities would hinder the ability of some firms to raise credit and could even make some technically insolvent. It is also feared that some shipping companies may switch business from UK ports to Zeebrugge or Rotterdam.

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Bob Neill, the Shadow Minister for Local Government, said: “Small firms in ports across the country were already struggling to make ends meet. Being hit with unfair, retrospective taxes now threatens to sink these firms. Spreading out the tax hikes over a number of years simply will not help, given these new liabilities will still show up in companies' accounts, hitting their bottom line.

“All the Whitehall spin can't hide the fact that this is another Gordon Brown tax blunder, just like his 10p tax con. Labour Ministers' incompetent handling threatens to blow another hole in the economy and damage British competitiveness.”

The Treasury Select Committee recently urged the Government to take further steps to mitigate the difficulties faced by affected firms, after concluding that the Valuation Office Agency “is to blame for the situation” they face.

However, Local Government Minister John Healey said yesterday he believed that firms had had “plenty of time” to prepare for the higher bills.

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