Struggling department store Beales has forked out over £1 million more than it should have in business rates, according to a property expert.

According to research by Colliers International the retailer – which is teetering on the brink of collapse – has overpaid by £1.06m over the past four years due to the downwards phasing introduced following the revaluation of business rates in 2017.

Colliers International say Beales will pay out £2.85m in business rates this year alone.

Beales boss Tony Brown has branded the business rates system as “lunacy”, as he and the company’s senior management team battle to stave off administration.

His ambition to secure a more “profitable future” for the company is hinging on crunch negotiations with landlords and councils across its 22-store estate.

But Sky News has reported that Beales are to hold a board meeting on Monday that will pave the way for KPMG to be appointed as its administrators - in a move that suggests negociations have not worked out.


John Webber, head of business rates at Colliers international, said Beales was in real danger of becoming the “latest victim of the absurdity of the business rates system”.

“In a period in which retail has already been struggling due to internet competition and other rising costs, such rates reductions have been pitifully inadequate and have certainly contributed to the business’s current demise,” he said.

Colliers International claim Beales should have seen a 14 per cent reduction in its rates bill to reflect the 14 per cent fall in its rateable value in 2017.

However, it saw just a three per cent drop in 2017/8 and then a smaller drops of just one and two per cent in subsequent years.

Business rates are based on a property’s rent.

Transitional relief was designed to reduce the increase by which rates would rise following an upwards rent revaluation, staggering the rise over a four-year period.

But to keep the total business rate tax take revenue neutral, this has been funded by those businesses based in areas where rents were dropping and who should therefore seen their business rates payments reducing.

Mr Webber said the slow nature of downward phasing had meant “many struggling companies have perversely been paying more than they should be, whether or not they could afford to”.

He added, “Of course Beales is not alone. Many other stores who have joined the long list of CVAs and administrations since 2017 have suffered in a similar way.

“A number of Debenhams and House of Fraser stores on the closure lists were there because they were paying artificially high business rates due to phased downwards transition.

“Toys R Us suffered the same fate and was paying many hundreds of pounds worth of business rates bills higher than it should have been.”

Beales has filed notice at the High Court of its intention to appoint administrators while talks continue with landlords and local councils across its store estate.

Mr Brown has warned that administration could be days away if the talks to not bear fruit.

The company, which put itself up for sale before Christmas, has been looking to cut costs to stay afloat following poor Christmas trading and has warned of store closures.

And it has also been reported that Beales are in talks with two potential buyers – one a rival retailer and the other a venture capital investor.