A LIVESTOCK industry leader has warned some auction marts face a choice between making “drastic” changes to the way they operate or closing down, following England’s controversial business rate revaluations.

Chris Dodds, executive secretary of the Livestock Auctioneers’ Association (LAA), said marts “can’t sustain disproportionate business rate hikes” and repercussions would “be felt far beyond the auction ring” unless affordability and running costs are considered when business rates are calculated.

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Unlike other businesses, where rates are based on rentable value, auction marts are assessed on turnover, which is often high but with tight profit margins.

As the Gazette reported earlier this month, livestock marts throughout England and Wales face paying tens of thousands extra a year in rates. In the case of J36 at Crooklands, the bill will to rise to £80,000 while the mart at Hawes will need to find £53,000.

“Many of our members are telling us that they will either need to change something drastically to make their business viable, or cease trading,” said Mr Dodds.

“Some of our larger markets are facing rises of 200 or even 300 per cent and this threatens the sustainability of the industry. Markets are the heart of the rural economy, and have an important social responsibility beyond the auction ring.”

In coming days, the LAA will meet with the Valuations Office Agency’s head of livestock markets to highlight the concerns of the industry, which faces an average increase of 86 per cent in rateable values.

Mr Dodds said: “The LAA position is clear and we appreciate as an industry we must make our fair contribution to finance local authorities and services. We also appreciate that the 2010 valuation took into account the foot and mouth and blue tongue disease outbreaks.

“But it does mean that it is now eight years since the last valuation. We always anticipated a rise, but these increases are beyond anything that may have been predicted.”

Auction marts have shown significant rises in turnover during the eight years since the last revaluation, according to John Hall, an auctioneer and LAA council member.

He said: “With stock values rising and favourable changes to the value of the pound, turnover has increased, but equally costs have risen and therefore there has been little or no change to margins.”