BUSINESS rate increases of up to 300 per cent for some auction marts are being opposed by the Livestock Auctioneers Association (LAA).

It has warned the rises could lead to the closure of some marts, mean higher charges for farmers, and have repercussions in the wider rural economy.

The LAA will meet the Valuations Office Agency’s head of livestock markets at the end of February.

The average increase for marts is 86 per cent, based on their turnover. The LAA says most have seen significant rises in turnover since the last revaluation eight years ago, but said costs have also increased.

Auctioneer and surveyor John Hall, senior partner at Howkins & Harrison of Rugby, said: "Costs have seriously increased. Additional biosecurity measures, electronic identification of sheep (with cattle soon to follow), the extra people and equipment involved to manage these changes, all add up.

"Some have had to redesign their market pennage and lairage, big rises in water costs and effluent charges are major overheads for all markets, rises that can’t be controlled."

Chris Dodds, LAA executive secretary, said many of its members said they will either need to change drastically to make their business viable, or cease trading.

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

Mr Hall said nobody appeared to be considering the affordability of the rate rises. "Undoubtedly some markets will close and the important service they provide, not only to farm businesses but also to communities and jobs, will be lost."

There was little doubt the increased cost would filter down the supply chain and ultimately hit the farmer. He said some 20 percent of an auctioneers’ commission already goes straight out on business rates, and this figure was only likely to increase, much to the chagrin of the farmer.

Mr Hall said two other factors would also seriously compromise the competitiveness of the industry.

Traditionally there had been a transitional scheme to help absorb rate hikes. Previous revaluations gave a buffer of a maximum rise of 12.5 per cent but this time it would go up to 42 per cent.

A business can still appeal, and if the initial appeal is not accepted it can go to a rating tribunal. However, even if successful, changes mean the business may still have to pay.

Mr Hall said: "A major concern across industry is the government’s announcement that it will not change a listing, even if an appeal has been won at the rating tribunal, if the new rate level is within 15 percent of the original figure.

"That means, in theory, that a business could query a valuation of £200,000, have their appeal accepted, and see the valuation reduced to £185,000, but with the 15 percent rule, the government would not change the listing and the business would still have to pay the original figure of £200,000.

"These may be extreme figures, but the principle is clear and it is simply not fair."