Hotelier loses £19,000 over rating mix-up

01 January 2000
Hotelier loses £19,000 over rating mix-up

A LONDON hotelier who unwittingly signed away his right to thousands of pounds of deductions on his rates bill is warning other hoteliers to take care.

Ciddy Patel, owner of Kensington International Hotel, Templeton Place, claims he has been overcharged by about £19,000 over the past two-and-a-half years because he asked for his hotel to be temporarily zero-rated for a few months while it was being refurbished.

He was unaware that by doing this he was agreeing to his hotel being treated as a new business when it re-opened. New businesses are subject to significantly higher rates than old businesses.

He believes he could be one of many hoteliers to have made the mistake and says he is "furious about the whole situation". He has been pleading for a reduction for a year.

Old businesses are entitled to a deduction in their Uniform Business Rate bills if they have been in operation under the same ownership since before 1 April 1990, the date the rates were first enforced. This deduction is called a "transitional arrangement". Patel has owned and run his hotel since 1978, and paid the transitional business rate before the refurbishment.

He now faces a bill for £24,000 a year. He estimates this is £7,000 more than the bill he would have been given under the transitional arrangement. His previous rates bill, before the refurbishment, was just £6,000.

After the refurbishment the hotel had 56 rooms compared with 47 previously.

Patel said: "I was never warned that I would lose my transitional entitlement."

Despite spending more than a year campaigning, Patel said he had been constantly stonewalled by his Valuation Office. He is now hoping to enlist the support of his MP.

A spokeswoman for the Valuations Office, an executive agency arm of the Inland Revenue, said Patel's property would have been revalued anyway because he had significantly changed his property during the refurbishment.

She agreed that in some cases nominal rates can be charged during refurbishments, rather than properties being zero-rated.

All rates will be re-assessed in 1995 according to 1993 property values.

Martin Couchman of the British Hospitality Association said: "It could be sensible for any owner who thinks they can cover the legal fees to appeal against their ratings if they think they are excessive, although we are hoping the valuations will not be so far out this time."

Couchman said owners in the industry who appealed against their 1990 ratings received an average 40% reduction.

It is not known whether transitional arrangements will be retained under the new rates. The new rates will be determined by the Department of Environment.

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

close

Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking