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Business rate increases are an “absolute disaster”
Excessive business rate increases could leave some operators going bust, the British Hydropower Association has warned.
Speaking to Utility Week, association chief executive Simon Hamlyn said feed-in-tariff payments to hydropower operators made by the Department for Business, Energy and Industrial Strategy (BEIS) could be “clawed back” by the Department for Communities and Local Government through huge business rate rises.
Hamlyn said he has recently written to BEIS demanding to know what the “joined-up thinking” is in Whitehall.
“It’s an absolute disaster,” said Hamlyn. “It’s causing huge problems across the country.”
“These agencies sit in silos and they do not take notice of what each other is doing,” he added.
“Until someone grasps the nettle and says actually this approach is fundamentally flawed, you will end up with people paying business rates far in excess of what they should be paying – in some cases up to 35 per cent of turnover.
“We are saying the average rateable value should be no more than eight to 10 per cent of turnover in line with almost all other commercial rates, because that’s what the all rental evidence we have gathered points to,” added Hamlyn.
“And if this situation does not resolve itself, the £24 million [feed-in-tariff] budget being charged to consumer bills and allocated to hydropower will not be used for the purpose of investing in long life renewable energy projects, because people will not be able to afford to run the schemes, because the rates will be too high.”
Last month, the chancellor announced the government will double small business rate relief to 100 per cent, as part of the spring budget.
At the time, Hamlyn told Utility Week: “This announcement does nothing to help hydro businesses, which are seeing increasing of up to 900 per cent.”
The Solar Trade Association (STA), which has been campaigning for the rate increase to be dropped, added last month that 44,000 small solar farms face a “nasty shock” when the revaluation goes ahead.
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