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Small composters at risk of business rates

Smaller composting sites could be forced to close as the Valuation Office Agency (VOA) seeks to re-evaluate sites to charge them business rates which they cannot afford.

According to the Association for Organics Recycling (AfOR) some smaller sites, particularly those on farms have previously not paid business rates because they have “slipped through the net”.  Additionally, composting has now been reclassified as a commercial activity rather than an agricultural one, so farms will have to pay the rates even if they did not before.

Now, AfOR believes 45 smaller composting sites will definitely be visited by the VOA, after recently receiving a letter from the association informing them of this fact.

The association’s managing director Jeremy Jacobs said: “It seems the VOA dealt with the big fish first and are now catching up with the smaller ones.

“Clearly, it would be quite a significant cost for the smaller sites because costs associated with business rates are very high. It’s not good news.”

If the VOA decides to impose business rates on a site, AfOR believes these rates will be backdated to the last valuation that took place in 2005.

“For some businesses it could mean the end of the road,” commented Jacobs.

Countrystyle Group planning, estates and licensing manager and AfOR chair Charlie Trousdell said one of Countrystyle’s small sites in Bromley saw its rates nearly double from £40,000 a year to £70,000. He believes the rates on smaller composting sites could vary from £3,000 a year to £300,000 a year.

A spokesperson from the VOA said: “It’s come to our attention that there are 45 green waste recycling sites that are not currently valued for rating purposes.  Our aim is to value these quickly and bring them into line with the other 140 sites that are already in our rating list, while ensuring that we keep those affected by this change involved and informed. We expect to have these properties in the list by October.” The VOA added that regulations determine when any valuation becomes effective.

AfOR has been lobbying Government on the subject of business rates since December (see MRW story), when they predicted that new business rates to be imposed in April this year could see composting businesses paying 75% more in business rates. These rates are calculated on the size of the site and the amount of infrastructure on it, such as buildings and machinery.  However, Trousdell explained that just because you have a large site and lots of infrastructure, it does not always correlate that the company makes a huge profit to be able to pay high business rates.

The association wants the Government to change the way composting sites are charged rates, so that instead of paying charges on their sites and buildings, which AfOR believes is unfair and disproportionate,  composters pay a charge per tonne of waste they process.

Jacobs added: “One of the problems [with the current system] is that if a company’s feedstock decreases, they’re still having to pay the same business rates.

“Also, these rates are imposed by the local government and if they are increased or imposed where they were not there before, the company will have to pass it on to the gate fee, so the local authority ends up paying more to get rid of their organic waste. It’s another barrier to increase recycling.”

Moreover, AfOR believes that the current system penalises those sites which are thoroughly treating organic waste, using enclosed buildings and specific infrastructure to to stop odours and to monitor bioaerosols, because they will have to pay more tax. Meanwhile, basic composters will pay less because they do not have as much infrastructure.

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