A restaurateur in Peterborough has been left shocked by a huge business premises rates hike that could put his expansion plans on hold.
Talented chef Lee Clarke, opened the 32-cover Prevost, in Priestgate, 11 months ago in a former club premises as he pursued his dream of securing Michelin star status.
But he was stunned to find the change of use has sent the premises’ rateable value (RV) soaring from £6,100 to £40,500.
The rateable value is a key figure used by Peterborough City Council to determine how much has to be paid in business rates.
The increase has been ordered by the government’s Valuation Office Agency (VOA).
A letter to Mr Clarke stated: “This review was necessary as there was a change of use. Specifically from a club to a restaurant.
“As a result, I need to increase the RV for this property from £6.100 to £40,500.”
It adds this is back-dated to April 7 last year - when Mr Clarke moved in.
Mr Clarke, who employs three full-time and seven part-time staff, said: “It is a real kick in the teeth.
“It means I can’t expand the business, or take on more staff as I had planned.
“I feel we are being penalised because the restaurant looks nice.
“A club sells food and drink and so does a restaurant. What’s the difference?
“The premises are not even as large as they were before we moved in.”
He has appealed against the new valuation.
Councillor Richard Ferris, who has nominated Mr Clarke for a council business award, said: “I am stunned by this.
“I am prepared to stand by Mr Clarke and see what we can do about this. An increase of this level of magnitude will have an impact.”
The review of Prevost is separate to the national ongoing review by VOA of rateable values of business premises.
Peterborough MP Stewart Jackson said: “I think most businesses in Peterborough will find they are better off.
“I’ll be monitoring the issue.”
The council will send business rates bills to about 5,900 businesses from March 2.
A VOA spokesperson said: “We cannot comment on individual cases. Rateable values are based on an open market rental value on a fixed date - for this revaluation it’s April 1, 2015.
“If those open market values have changed, rateable values will change with them.”