LYME Regis Town Council is embroiled in a row over tax with former town and district councillor George Symonds.
Mr Symonds, the owner of the Marine Parade Amusement Arcade, has been informed that he will have to start paying VAT on the rent of the premises he has leased off the council for two decades.
In an angry exchange of views at last week’s council meeting, Mr Symonds claimed that the £9,000 VAT he is now being asked to pay on his rent is being charged so the council can reclaim VAT for proposed major resurfacing works on the flat roof area above his premises.
The council budgeted £400,000 for the resurfacing and renovation of the flat roof area above the Amusement Arcade, Antiques & Craft Centre and SWIM, but was recently told it would have to scale back the project as it had been costed at almost double the budget.
Mr Symonds told councillors that if they wanted to save money they should look first at the operation of their own office, alleging that £100,000 had been spent on dealing with staffing issues and “industrial tribunals”, which the council has strongly denied.
Despite being a long-term tenant, Mr Symonds has not had to pay VAT in the past, and the Antiques & Craft Centre and SWIM will also have to start paying the tax.
The decision to charge VAT on the rents was approved when the council went into private session at the end of last week’s meeting, after receiving legal advice that they were entitled to do so.
Mr Symonds, who previously served on West Dorset District Council, made his damning statement in the public forum at the beginning of the meeting, accusing the council of “borderline tax evasion”.
He also described the way he had been treated as “appalling” as there had been no prior consultation with him or any of the other tenants.
Speaking at the meeting, Mr Symonds said: “First of all, I want to say what an appalling way this has been handled because no one from the town council’s offices or the town clerk has contacted me or any of the other tenants.
“You’re trying to push something through without any feedback from someone like myself about the impact it could have on them, and I think it’s extremely underhanded and very poor when business is concerned, I certainly wouldn’t do this to somebody. “You’re trying to charge VAT on my rent. VAT is 20 per cent, which will increase my rent by more than £9,000.
“I’m sure in your report in explains in detail about Machine Games Duty (MGD) and how the complex law of that works in this area. I cannot claim the VAT back on my rent; I am VAT registered but one of the stipulations of MGD is that I cannot claim VAT on rent, so this would cost me £9,000 a year and over for the next 20 years. I don’t think it’s acceptable to put 20 per cent on my rent straight away.
“After all these years, why has this council decided to charge VAT on the tenants’ rent of the Antiques Centre, SWIM and the Amusement Arcade?
“Why the change? I’m sure your report will cover this. The change is that you’re trying to repair the area above our premises and claim the VAT back from your tenants. This is actually on the borderline of tax avoidance by the town council, because you’ve had 20 years of charging no VAT and now all of a sudden, because you’re doing a job on those shelters, which have had very little money spent on them over a number of years, you want to charge your tenants VAT – tenants that have been loyal to you all over this period of time.
“If that doesn’t come near tax avoidance, I don’t know what does… I’m not going to lie down and just try and find £9,000 a year, I’m going to fight it tooth and nail.
‘Setting a very low bar’
“This is certainly not a way to treat leaseholders, it’s no way to treat tenants. If you’re trying to work with the business community, this is setting a very low bar to start with because nobody from the town council office has contacted me whatsoever.
“If this town council wants to save money, what they need to do is look at their own office. Look at where these industrial tribunal cases are coming from and the £100,000 it’s supposedly cost so far, including a potential payout you may have to make to a third party.
“That’s where you want to start, look at the office and not at people who are trying to work hard for a living, employing people in this town, and have been doing so for a long time.”
The Mayor of Lyme Regis, Councillor Brian Larcombe MBE, said he was unaware of the lack of correspondence between the council office and tenants.
He added: “We as councillors are lay members when it comes to understanding tax issues. That is why we’re trying to take a careful approach here; that’s why the previous meeting on this was postponed so we could gain a better understanding and then come to this meeting having learnt what the aspects and issues are.”
The town clerk John Wright added: “This council has not made a decision in terms of what it wants to do, there’s no information for me to communicate. This organisation needs to decide what it wants to do before I have a dialogue with the tenants.
“To say we are thinking about doing something, ‘we might do this, we might do that’, is not right. When you decide what you want to do there will be communication with the tenants.”
Mr Symonds replied: “I don’t think that’s right, it would be certainly good manners to come along and say ‘this is their intention’.”
Addressing Mr Symonds’ allegations after the meeting, the town clerk said: “In considering its decision, the council took legal and expert financial advice. The council is a statutory body and would not embark on any activity which is unlawful.
“The council has not been party to any recent employment tribunals and hasn’t spent £100,000 on employment tribunal related payouts.”
Mr Symonds, however, is now seeking legal advice on the issue and had submitted a Freedom of Information request to the council on a number of issues. Information requested includes the amount spent on employment tribunals and financial consultants in the past three years, how much the council has made by letting the flat roof area above his premises for events, and, in a completely unrelated topic, how much the council has paid in rent for the Sidmouth Road park and ride site since it ceased operation.