Sheffield bar has rateable value slashed by 40 per centPosted by: Ashley Birch
Pina's owner Joe Cribley (left) with bar manager Cole Johnson
Pina in Kelham Island has successfully challenged its original valuation after a 12 month legal battle
Owners of a popular Kelham Island tequila bar are ‘relieved and frustrated’ after successfully challenging its property’s rateable value following a 12-month legal battle, which culminated in the valuation being reduced from £34,000 to £20,000.
While the owners Pina have found a solution to their problem, other businesses including other Kelham Island success stories Church – Temple of Fun and Cutlery Works are currently facing similar battles over disputed rateable values.
The rateable value of a property is calculated by central government’s Valuations Office (VOA), and that figure is then used to determine the business rates each business is due to pay, which is enforced and collected by the local council.
When Pina’s owner Joe Cribley signed the original lease on the Harvest Lane building, the property’s valuation stood at around £5,000, based on its previous use as a workshop. Following the building’s change of use to a bar, and a visit from the VOA where Joe says they asked for ‘some fairly rudimentary figures’ about turnover, the valuation was increased to a whopping £34,000.
“I accounted for the fact that rates will increase,” says Joe: “I understand that we as a business will earn more money than a workshop would have previously, and I’m not against business rates at all. I’m really glad to be paying them, if they’re going back in and improving the area.
“But when it goes from £5,000 to £34,000, that I can’t understand. I can’t say that I know any bars that have actually closed because of business rates, but it can’t be helping if this is the way they are valued. After our lengthy appeal it was reduced so significantly I don’t understand how the initial valuation was so wide of the mark. That to me just demonstrates gross incompetence.”
When asked how it is possible for such a large discrepancy to occur between Pina's orginial and new valuations, when little to no information has changed, a spokesperson for the VOA said: “We cannot comment on individual cases.”
They added: “The VOA has a statutory duty to compile and maintain accurate rating lists independently and impartially and uses Royal Institution of Chartered Surveyors recognised valuation approaches to do so.
“There are three industry-recognised methods of valuation used for estimating the open market rental value of a property. The Agency looks at the available evidence and uses that to select the method that will give it the most accurate estimate of a property’s open market value.”
Joe said: “If anyone has worked in any sort of bar or restaurant, there’s a high turnover of money, there’s also high wages. Turnover is not a good representation of how bars are doing, not even remotely.”
“You can imagine the sort of heart pumping moment when that bill is presented to you!”
Fortunately for Joe, following the increase he was contacted by Jonathan Weastell, a Business Rates Consultant for Robertson Simpson Ltd, who he instructed to challenge the valuation. After a lengthy process they were ultimately successful in their challenge and the new rateable value was significantly lower.
Jonathan said: “The reduced rateable value reflects the small number of covers and being in a novel location in an industrial estate. The appeals process is appalling, and too long but apart from the length of time for the Valuation Office to reduce the rateable value, the result was good.”
Joe added: “What it’s meant is that I’ve had to employ somebody to fight my case, at a cost of nearly £3,000 to me. It’s quite a complicated process, and there’s a lot of people working on a no win, no fee basis, and the solicitors are obviously doing that because they know that this is ridiculous.”
While going through the process of appealing, Joe tells us that the council, who are only responsible for collecting the bill, have been ‘brilliant’, and that they arranged a suitable and realistic payment plan that allowed Joe the time and space to challenge the valuation. However, this didn’t stop him receiving three court summons while the payment plan was in place.
The original court summons sent to Bar Pina
“I didn’t know how serious that was,” says Joe: “it’s not something that I’m familiar with and certainly getting summoned to court in any capacity is not what you want. For me, I’d opened a business on a certain understanding that rates were going to be one thing, then I get presented with a hideous and grossly inaccurate bill, then I get summoned to court. It was very scary.”
“I would advise other businesses to work with the council. Stick to a payment plan and come up with something realistic.”
A spokesperson for the council told VIBE: “If any rate payer feels the rateable value is too high, they can ask for the VOA to review this. This is through a process of Check, Challenge, Appeal and info on this can be found on GOV.UK.”
Offering further advice, Jonathan Weastell, of Robertson Simpson Ltd, said: “Seek professional advice, there are many ways to reduce liability other than the traditional appealing of the Rateable Value. Many professional firms offer a no win no fee service so as long as there are no ‘up front’ fees, they should get good advice.”