Freshney Place businesses landed with backdated business rates

Several Freshney Place businesses have been suddenly asked for thousands of pounds in business rates.

In a letter from North East Lincolnshire Council, seen by the LDRS, businesses have been told that previous arrangements for business rates to be included in rent will no longer apply. What is more, this has been backdated two years to August 4, 2022, the day the council bought the shopping centre.

It is understood five businesses have received the letter. The council has said the letter is as a result of an error in the way their business rates have previously been collected and it is working with affected businesses.

The letter sent to affected traders states: “North East Lincolnshire Council business rates team have been advised by Savills, the management team for Freshney Place that your lease is no longer rents and rates inclusive from 4th August 2022.” It advises businesses with queries to contact an individual at Savills.

In response to request for comment, a North East Lincolnshire Council spokesperson said: “In July 2022, the North East Lincolnshire Council took over Freshney Place. Since then, a management team, currently led by Savills and Queensberry, has run the shopping centre on behalf of the council.

“Since July 2022, the business rates for the five directly affected businesses have been collected from the shopping centre rather than from the businesses themselves. This was the result of a communication error between the management team and the council, and these letters were issued to correct that error.

“We are working through the background to understand why this happened, but in the meantime, we are talking with the directly affected businesses to offer support and discuss their individual circumstances.”

Business rates are a national tax, payable to the local authority. It is calculated by the value of a shopping unit and a multiplication of this, dependent on the type of business. Using gov.uk latest rateable values for shopping units in Freshney Place and the small business rate to multiply, the two year backdated rates required could run into a five-figure sum for individual businesses affected. However, there are rate reliefs that some of those affected can apply for.

A trader who the LDRS has been in contact with said they had no notice of the business rates change before the letter, received in the last week. The inclusion of the business rates in the rent for the shopping centre traders pre-dates the council’s £17.1m purchase of the shopping centre in August 2022.

Business rates going forward are expected to be paid separate to rent from September. The cost for an affected unit per month could be well above £1,000 – and that is before taking into account of the two years’ backdated rates.

The development comes as on Thursday a scrutiny panel looks over a joint council and Equans regeneration report for the first three months of 2024. This highlights the level of vacant units in Grimsby town centre as missing targets, with too high a proportion empty.

Grimsby Top Town Market occupancy levels were 36 per cent in January to March, down three per cent on the quarter before.