Posted: Fri 24th Feb 2017
Rosie Wolfenden MBE, co-founder and managing director of Tatty Devine, an independent British company designing and making original jewellery in Britain, explains the impact of an increase in business rates.
The rise in business rates has become headline news and has come a long way from when Tatty Devine received a letter from Tower Hamlets back in October last year. The letter was to inform us that our rateable value was changing in 2017. It didn't highlight what our new rates would be, but just showed a new rateable value which was printed in a small type, bottom right of the page.
As a small business this was quite bewildering as there was little or no information on what could be done about it or what the new rates would be. No indication of what the new multiplier would be, whether there would be any transitional relief or any other type of relief, making it impossible to plan. All I knew was that our rateable value which had been Â£12,000 was now a staggering Â£31,750, almost a 265% increase.
Fortunately for us, at Tatty Devine we are members of the EETG, and as a community of business owners we realised just what an impact this could make on us and the customers we serve. Together, we established that this was something worth fighting.
In 18 years of running a business and a shop, I've never seen such a steep rise in an overhead. We have watched the area redevelop over the last decade and the value of property rise beyond comprehension. Despite this, businesses have seen their turnover and salaries stagnate. The market is a fragile place and whether you're selling handmade jewellery, fixing cars or distributing groceries, there is only so much you can put your prices up before the consumers will simply not buy the product.
We recently relocated our London studio to Kent as property prices meant manufacturing in London became unviable. This hasn't just happened to us, it's happening all over London, and where space used to be accessible and an enabler of businesses, it is now a luxury.
The fact business rates are calculated on the value of the property they operate from adds insult to injury. We have seen no benefit from the rise in value of our shop on Brick Lane; the rising property prices have forced many local customers out of the area, leaving us with tourists who come to visit the hyped up and much celebrated area but don't necessarily spend money. Rates need a fair system which relates more to a business's turnover or profits, but not as a reflection of your landlord's assets.
Transitional relief is welcomed although in many ways it just delays the inevitable. Unless we see serious improvements in the economy, businesses may see no growth in turnover over the next five years and yet we will still be faced with having to find an extra Â£1,000 a month with no added benefits. This amount of money could literally mean the end for many businesses and it will break my heart if I see any more shops close due to spiralling costs.
Small businesses are not only crucial to the economy but also to the landscape of our local neighbourhood. They are outlets of creativity, employment and providers of an extraordinary array of choice that we have all come to love and expect.
The East End Trades Guild has brought together Tower Hamlets and Hackney Councils as joint petitioners, calling on Theresa May and her cabinet to devolve rates to London's Government, and to increase the small and medium business rates threshold.
Please sign and share our petition here.
Credit for image of Tatty Devine store: Sarika Thakorlal