Beales paying £1m more in business rates than it should be

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Beales paying £1m more in business rates than it should be
Colliers estimated that Beales has paid £1.06 million more in business rates than it should have in the years since the 2017 revaluation.
// Research has found that Beales has been paying over £1 million more in business rates than it should be
// Colliers, who collated the figures, said the department store has been “crippled” by the rates’ transition relief
// Beales is teetering on the brink of collapse, with 22 stores and more than 1000 jobs at risk

Research has found that Beales has been paying over £1 million more than it owes in business rates, as the department store teeters on the brink of a possible collapse.

According to data from property consultancy firm Colliers International, Beales’ 22 stores are paying a total of £2.85 million in business rates this year.

However, according to Colliers’ estimates this is more than they should be, and this was attributed to the downwards phasing introduced following the 2017 revaluation of business rates.

Adding up the four years of overpayment by Beales, Colliers estimated that Beales has paid £1.06 million more in business rates than it should have in the years since the revaluation.


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The news comes after the department store retailer recently filed a notice of its intention to appoint administrators, placing around 1000 staff at risk of losing their jobs as Beales warned it was on the brink of collapse unless a new buyer for the business is found.

In addition, just before Christmas Beales appointed KPMG lto conduct a strategic business review and to examine different options for refinancing.

One the options included putting the Bournemouth-based retailer, which was founded in 1881, up for sale.

Beales is also negotiating with landlords in the hopes of securing cuts to their rent.

1000 jobs at risk as Beales lurches towards collapse
Beales, founded in 1881, is facing an uncertain future even despite a change of hands in October 2018. (Image: Twitter)

Colliers said the retailer’s overpayment in business rates indicates it was “crippled” the transnational relief that is part of the rates regime.

Transitional relief was designed to reduce the increase by which rates would rise following an upwards rent revaluation, staggering the rise over a four-year period.

However, to keep the total business rate tax take revenue neutral, this relief has been funded by businesses based in areas where rents were dropping and who should therefore have been seeing their business rates payments reducing.

Instead, for many businesses, business rates reductions have been phased in slowly with the result that many struggling companies have perversely been paying more than they should be, whether or not they could afford to.

Colliers said that in Beales’ case, the department store saw a 14 per cent decline in its rateable value in the 2017 valuation and therefore should have seen a 14 per cent reduction in its rates bill.

In reality it only saw a three per cent drop in 2017/8 and in subsequent years the drops were -1 per cent and -2 per cent.

Beales chief executive Anthony Brown said called business rates situation a“lunacy” and said that in some stores the rate bill is three or four times the rent bill.

Colliers head of business rates John Webber said Beales was not alone.

“Many other stores who have joined the long list of CVAs and administrations since 2017 have suffered in a similar way,” he said.

“A number of Debenhams and House of Fraser stores on the closure lists were there because they were paying artificially high business rates due to phased downwards transition.

“Toys R Us suffered the same fate and was paying many hundreds of pounds worth of business rates bills higher than it should have been.”

Webber added: “There is one chink of light at the end of the tunnel. We are about to see a new revaluation in 2021 and given retail rents have collapsed, business rates falls should in theory follow.

“Of course, the government could put a spanner in the works and again introduce downwards transition as it did in 2017, limiting reductions. But that would be disastrous.

“One can only hope (and pray) that Mr Johnson and his colleagues have learnt from the deserted high streets of 2020 and the thousands of jobs losses -and provide a fairer playing field for the physical retailers.

“If he doesn’t, I’m afraid the crisis can only get deeper.”

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6 COMMENTS

  1. That is fair enough but have you been in any Beales shops? This may be a factor but the shops are terrible. The one in Worthing looks like it’s been closing down for years and years and the new one in Fareham is just filled with gadgets at cut prices with a dire drab clothes section and two concessions at the back. The shop is not a Beales brand shop. This shop is a joke and not what I expected of Beales.
    Cannot keep blaming people habits, Brexit, internet etc etc.
    High streets are drab and all the same and some been so neglected over 10s of years so much so no one wants to go there. It’s big chains greed at setting up shop in every high street in the UK and now they are all the same and no longer a special place to go. You go to one and you have no need to go to any other. I mean how many Nexts and Top shops or whatever chain of shops does one country really need. They drove up the demand and prices for property and drove out small shops. They are to blame for their own downfall and I have little sympathy.

  2. Interesting point made by Sally .
    However the reality is very clear that shopping habits have changed as more is online.
    John Lewis stores are fresh and well stocked with leading brands and still they find it very difficult with sales down.
    Boris Johnson holds the key to enable the high street and town centres to rejuvenate by slashing business rates in half for all and not just for the few .

  3. People often blame the internet for the downfall of the hight street, and I’m ok n no doubt it makes a difference, but I’ve said for years that supermarkets are mostly to blame as they’ve turned themselves into One-Stop centres where you can literally buy everything you need, and the buying power of these means they can easily undercut other retailers. Yes it’s convenient, but at the cost of the high street. So if we want to really see a difference on the high street, Supermarkets should sell just food goods, allowing other retailers to stand a chance in their fields.

  4. Sally may have a point about the image of Beales , however when a store or any business are unable to generate income to invest in their public face they have no option sometimes but to make the best they have , the biggest enemy of the high street trader is the greedy local councils that charge extortionate business rates in advance while providing no services to the payee purely to fund their pension plans , which can be anything up to 67% of ALL rates collected but are generally wholly 100% of business rates , while granting planning permission to any large supermarket, usually tax avoiding companies , anywhere and everywhere regardless of the effect to the local high street as long as their fat pensions coffers are full to bursting .
    Many businesses that have recently suffered on the UK high street seem to prosper on foreign soil where local authorities are much more sympathetic to the local community as a whole and traditional shops live healthily in their local town centres .
    Of course the UK consumer has to take some of the blame with the use of overseas tax avoiding online retailers , the moral is “ Use it or lose it” companies like Beales didn’t survive for 140 years by accident but there again they probably didn’t have greedy councils to put up with .
    Not only will town centres die they will become liabilities and hence worthless .

  5. Town centres are dieing also because of the councils war on the motorist it’s so difficult getting into centres with one way systems n roadworks and then the cost of parking is atrocious so many people are staying away it’s hard carry much shopping on a bus. . But I also agree some shops havent moved with the times and some high streets just seem so tired and unwelcoming coupled with online and an unfair playing field no wonder shops are struggling

  6. We have never been in to Beale’s Department stores but the problem is Business rates in some cases cost more than the actual rent of the store. Even if the rent is free the store can still be loss leading.

    Business rates needs to be reformed as this is the main reason for shop closures with the chains.
    It needs to be on turnover and size and location not on rateable value.

    Government sets the rates. I haven’t shopped in a Beale’s store but some people do like their stuff but the stores people are talking about were previously Bentall’s stores in many cases think Tonbridge and Worthing and were sold when Fenwick acquired Bentall’s to Beale’s. I think the department store format is struggling even John Lewis who are not opening any more stores and have cancelled plans to open in Portsmouth. An online tax needs to be placed !

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