Wednesday 16 July 2014
Guernsey Press Enquiry:
I have a request for a response on the subject of TRP rates. We have been contacted by the director of a local property holding company about the current rates, which he feels are unfair and disproportionate.
This request is mainly for Treasury & Resources but as part of the argument involves Environment and their granting of permission as to what a building can be used for, Denise I hope you might be able to get some comment from your department on that side of things.
Here is a summary of his concerns.
"The laws on TRP are not being interpreted fairly and unjustifiable for businesses with more than one use for their buildings". For example, he says that a retail outlet is likely to have a larger warehouse for storage, or a financial services company might have warehouse spaces for archive storage. The retail TRP rate (£8.45) is much higher than the warehouse rate (£4.15) per sq metre, and even though the retail outlet is only a very small percentage of the building: "Most warehouse's have an outlet of some kind. Even if it's (the retail outlet) only a 10th of the space, it's still charged at that rate for the whole building, even though most of the building is warehouse storage, which is a much cheaper rate."
"There is unfair charging of tax of what is incorrect/disproportionate rate for the use of the building. Why should businesses/property owners have to pay the more expensive retail/financial services (etc) rate when it is only a small percentage of the building? This idea that if one small part of the building is retail, the whole building is retail rate is disproportionate and unfair."
Basically he believes it is wrong for Cadastre Department (under the umbrella of Treasury & resources) to charge the higher rate (e.g. retail) when that is only a small percentage of what their building is used for the second point of this (hopefully this is where you can get a comment from Environment) is that Environment gives permission as to what a building can be used for, so a business might be being charged a retail rate for their whole building, but not even allowed to use "Environment's laws on the use of a building are preventing businesses using warehouse areas for what they are being charged for (retail rate)." i.e. being charged retail by T & R but not being allowed to use that area for retail because Environment only allows its use as a warehouse for storage.
He basically believes there needs to be a review of the system and that business' charges should be broken down. i.e. only charged the retail rate for the part of the building that is actually used (and has permission for) retail and for the warehouse part, be charged the warehouse rate.
My questions for response are as follows (I hope you can provide comment on Environment granting permission)
1) Will there be a review into how TRP rates are charged and does Treasury & Resources agree that it is disproportionate to be charging the more expensive rate for a whole building when only a small part of it falls under that rate?
2) Why does Cadastre/Treasury & Resources current operate under the system it does? Why is it not broken down into different areas of a build, e.g. retail, warehouse etc. i.e. why is a retail business charged a retail rate (more than double warehouse rate) for the full building when retail side is only a small percentage of the building use, with the rest as warehouse/storage.
3) Is it possible to start charging business TRP at a more broken down rate with different rates for each different use of the building?
4) Does there need to be better communication between the two departments to allow the correct rates to be charged for each part of a building?
5) Is it unfair that business are charged the higher rate for the whole building, such as for retail, when they are not allowed to use the warehouse for retail because Environment have given permission for warehouse/storage use only?
6) What communication is there between the deparments on this issue currently? How does the current system work?
7) Any other comments either department has on the operation of the current system and what/if any changes could be made.
Hopefully Environment can produce a response to questions 4, 5, 6 and 7, and hopefully and answer to all questions from Treasury & Resources.
I know it's wordy but I hope that all makes sense! I am waiting to hear from our news editor whether this is for tomorrow or not, but if it is possible to have a response by 4pm today please to be on the safe side, that would be brilliant. I of course appreciate that this request is coming after midday but I have spent the morning talking to the man with the concerns and collating all his thoughts to present to yourselves.
Environment Department Response:
The Island's Planning Laws and the Laws on TRP are entirely separate and the position under one cannot influence the position under the other. Issues relating to TRP are not material planning considerations under the Planning Law.
The use of buildings is regulated under the Planning system in that a material change of use requires planning permission. Any planning application is then determined having regard to the Planning Law, the approved planning policies of the States and all other material planning considerations.
The current planning policies in Guernsey seek to protect the vitality and viability of the main retail centres of St Peter Port and St Sampson, and also protect the Island's stock of industrial land. Consequently, proposals for retail use of an industrial or warehouse building outside the main retail centres would be unlikely to be supported in Planning terms, having regard to the Planning Law and policies of the States.
Contact Information:
Jim Rowles, Director of Planning
Environment Department
Tel: 717200
