Shocked small Harrogate shop set to pay more than Harrods!

The owner of a small independent Harrogate boutique is reeling from the shock news that she is paying higher rates of property tax than Harrods.

Thursday, 23rd March 2017, 2:56 pm
Updated Friday, 24th March 2017, 10:11 am
Shocked - Sophie Hartley of Sophie Likes boutique on Beulah Street, Harrogate.

Sophie Hartley of Sophie Likes boutique said she was horrified when she discovered her business rates on Beulah Street would be charged in a higher way than the prestigious London department store.

Sophie said: "I was shocked to hear that my business rates are more per square foot than Harrods."The high street is facing a challenging time and local independent businesses need support from the councils in order to survive and thrive. "It seems as if they are trying to out price the small businesses so they can longer exist."Offering a range of lifestyle gifts both handmade and sourced, including jewellery, the quirky and innovative Sophies Likes has found itself being seen by millions of readers in a major feature of the Money Mail section of the Daily Mail.

The newspaper made the following comparison:A. Sophie Likes... boutique, Harrogate, employs two people2017 rate: £495 per sq m.B. Harrods, Knightsbridge, Central London. Group turnover £788 million. 12,000 staff2017 rate: £243.50 per sq m.

Although, Sophies rates are about to fall a little under the new system, the shop's owner would argue they scarcely add up to any sort of fairness.Sophie said she feared for the whole future of Harrogate's small independent shop sector because of the government's controversial changes to the business rates system.She said: "Although my rates have decreased since last year they are still very high and are one of our largest annual outgoings."If something doesn't change then Harrogate's small businesses will be forced to shut and large retailers will move in and the magic and charm that makes Harrogate a popular place to visit and shop will change.

The problem arises because under government rules, business rates are calculated on a property's annual rental value, rather than the firm's size, turnover or profits.Harrods' business rate bill is at a lower rate than Sophies because few companies would be willing to rent such a vast space in central London, decreasing the rental value per sq m.After a storm of criticism, the Government did announce temporary relief for small businesses.But the bad news for Sophie Hartley and for many other small shops is that the rental value of Sophie Likes is too high to qualify for the cap on rates hikes of £600 a year announced in the Budget recently.