Overwhelmed by paperwork and red tape, you receive an unexpected visit from a plausible salesman who tells you he can ease the financial pressure.
As you’re willing to take any step to save your company – and you lack an understanding of the Byzantine business rates regulations – you sign on the dotted line. You later discover that you’ve signed a long-term contract for reliefs you could have obtained just by sending a letter to the council.
But the nightmare has only just begun. In some cases, the small business involved has been charged an annual fee of up to 52 per cent of the ‘saving’ for the length of the contract, which can last for up to 12 years.
There is growing evidence that the failure of successive governments to provide clarity over business rates is being exploited by unscrupulous individuals who are conning small business owners out of cash they need to survive the pandemic.
John Webber, the head of business rates at Colliers, said: “The complications and complexities are down to all governments over the last 30 years. They have created a system that allows these cowboys and criminals to operate.”
Nanette Chaplais, who has a deli café, Maison Chaplais, and a bistro café, Chaplais Kitchen, said she had twice been the victim of rogue surveyors.
She said: “One very smartly dressed and professional looking gentleman persuaded my husband and I that he could recoup us thousands of pounds in overpaid rates, and in future on our rates bill. We paid him a fee of £900.”
He later contacted Ms Chaplais to tell her she was not entitled to a refund after all.
She said: “Surely we need a system where it’s easy for people like me to see who is reputable or not? How on earth can someone with a small business know how to separate the wheat from the chaff?”
Deborah Spicer, the former Director of 1884 Wine & Tapas Bar in Hull, was approached by an agency which offered to secure a reduction in the restaurant’s business rates.
“Their representative called at our restaurant early in 2018 to talk to me about business rates. He told me he could get us a reduction. He said all we would have to pay would be 25 per cent of any rates savings that their company was able to secure.”
She was later advised that the rates relief which the representative had promised to secure was something she was already entitled to. She didn’t need to pay anybody to get it.
She said: “All businesses have so many other things to worry about and are likely to welcome anything which will lighten the load.
“In the end we didn’t have to pay anything and we never heard from the firm again but it was very worrying at the time.”
Mr Webber said: “Some of these cowboys are not just disreputable, they are criminals. They wouldn’t think twice about changing a piece of paper after a customer has signed it.”
A Government spokesperson said companies should be aware of unsolicited approaches on business rates and report anything suspicious to Action Fraud.
“Many businesses may automatically qualify for business rates relief to reduce their bill,” the spokesman said. “More information is easily accessible on the Government’s website.”
There is legislation – such as the Business Protection from Misleading Marketing Regulations 2008 – which can be used to keep the rogues at bay. A final report from the Government’s fundamental review of business rates will be published in the autumn.
In times of crisis, there will always be crooks who try to cash in on those who are burning the midnight oil to keep their business afloat.
The Government must heed Mr Webber’s advice and devise a new, streamlined, business rates system which is easy for the layman to understand.
Villains prosper when confusion clouds our financial affairs. By providing clarity, the Government can stop the rogues before they find new victims.
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