Philip Hammond’s company received business rates cut in Budget, figures show

Chancellor’s property firm to save more than 10 per cent over next five years

Holly Williams
Sunday 26 March 2017 19:16 BST
As other firms face business rates rises, Hammond's property company will pay less, it has been revealed
As other firms face business rates rises, Hammond's property company will pay less, it has been revealed (Getty)

Chancellor Philip Hammond’s property firm has been handed a business rates cut of more than £12,000 over the next five years, as the Government hits thousands of other companies with crippling hikes.

Castlemead – the housebuilder and care homes developer set up by Mr Hammond – will pay 10.9 per cent, or £2,472 a year, on average less under next month’s controversial revaluation, according to figures compiled for the Press Association.

Self-made millionaire Mr Hammond still owns a controlling interest in Wrexham-based Castlemead, which will see its annual head office rates bill drop by £12,361 over the next five years, data from business rent and rates specialists CVS reveals.

It piles yet more pressure on the Government over its April 1 changes to business rates – the commercial equivalent of council tax – after a raft of revelations in recent days, reinforcing calls for a reform of the system that has been slammed as unfair and illogical.

It was revealed last week by the Press Association that former Chancellor George Osborne’s family wallpaper firm is to enjoy a business rates cut of more than £3,400 a year for its showroom in London’s swanky King's Road, while shops, pubs and restaurants on the same street are facing eye-watering increases.

It has also since emerged that the Government department responsible for the England revaluation – the Department for Communities and Local Government (DCLG) – will see rates on its Westminster headquarters fall by more than £265,000 this year.

Mr Hammond’s Castlemead firm is based in Wales, where the rateable value of property is calculated by the Valuation Office Agency (VOA), while the pence in the pound paid by firms in rates is set by the Welsh Assembly.

News of Mr Hammond’s business rates windfall will likely fuel anger among thousands of small firms facing steep increases due to the revaluation.

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Firms in London are set to be among those hit hardest due to soaring property values, with the Institute for Fiscal Studies (IFS) estimating businesses in the capital will see rates rise by around 11 per cent above inflation over the next five years.

And while Mr Hammond’s firm is set to see a double-digit fall, businesses on average across Wrexham Borough Council will see a 0.2 per cent increase.

Liberal Democrat leader Tim Farron accused the Government of “looking the other way”.

He said: “Another day and another senior Tory sees their business rate bill fall while many other businesses see theirs rocket.

“This could cripple businesses and the Government is just looking the other way.

“We have a system that is no longer fit for purpose, it needs total reform.”

Mr Hammond’s office remained tight-lipped on Castlemead’s rates cut, but a spokesman said the Chancellor “has no day-to-day involvement in Castlemead”.

Mr Hammond set up Castlemead in 1984 with business partner Terry Gregson.

Since becoming a government minister, his stake has been controlled by an onshore discretionary trust. While the business is not run on a day-to-day basis by Mr Hammond, he is still the main beneficiary.

A spokesman for the VOA said: “Rateable values are set independently of ministers by the VOA and reflect the open market rental value on a fixed date – for this revaluation it’s April 1 2015.

“If those open market values have changed, then rateable values will change with them.”

Press Association

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