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Dispute at Pillings


andy the hammer

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1) When I last rented a business premises (10,000sq ft shop) the Business Rates exceeded my rent.

 

2) I'm sure Mr Steadman figured this out long ago, therefor there must be a concealed reason we can only guess at for him keeping PL in ungainful employment.

 

MtB

 

Its not just the 'buildings' that are subject to Business Rates - we were paying Business rates on a 'field of 60 acres' as well as on the buildings.

 

Presumably a marina pays Rates on the total 'land / water area' as well ?

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An Inland Marinas Buisness rates on the 'marina' portion of the business (in addition to the 'buildings) is

 

For a marina 80% full the rates are charged at 11.6% of the MAXIMUM Berthing Income (assuming 100% of berths filled)

 

So - on the guesstimated £312,000 mooring income the business rates on the 'Water & Land' would be £36,000 and then add in the rates on the buildings etc it comes to a 'tidy sum'.

(People who have not run a business have no comprehension whats involved in being a Govenment tax collector)

 

1) Agreement

An agreement has been reached with agents Lambert Smith Hampton Consultant Surveyors and Valuers acting for the British Marine Federation and the Yacht Harbours Association together with Savills and R K Lucas & Son (Chartered Surveyors).

It provides an agreed basis for the 2010 Lists to arrive at the Rateable Value of private commercially occupied marinas (and where appropriate, yacht harbours) and is recommended for adoption for all relevant properties in England and Wales.

2) Scheme for R2010

For the purposes of this scheme, a marina is defined as a business which provides managed berths for boats where the marina operator may supply services in addition to berthing facilities.

The agreed scheme incorporates the value of all relevant berthing income i.e. moorings and infrastructure ("Basic Rateable Value") within the scales set out in para 5 below together with the value of non-berthing accommodation or facilities such as fuel sales, boat storage, parking, workshops, shops, etc, which is reflected by means of applying a percentage to any additional income generated (para 6).

The scheme is intended to value Marinas and any ancillary activities – Where the Marina appears to be ancillary to a larger activity such as boat building, consideration should be given as to whether “Marina” is the correct description, and the use of this scheme should be limited to the valuation of that part relating to the Marina berths and associated services (if any) provided.

3) Basic Rateable Value

The "Basic Rateable Value" is arrived at by applying a percentage (taken from one of the 5 scales set out in paragraph 5 below) of the Maximum Berthing Income (as defined). This will relate to income from the berthing element only.

4) Calculation of Basic Rateable Value (i.e. Berthing Income)

  • The Basic Rateable Value is to be determined by taking a percentage of berthing income assuming full occupancy (i.e. Maximum Berthing Income). The percentage to be adopted will vary depending upon the level of potential occupancy at the Antecedent Valuation Date (1 April 2008). Full occupancy should exclude any mooring which, taken together with a moored boat, is subject to Council Tax Banding.
  • Maximum Berthing Income should be calculated having regard to one or more of the following:

i) Marina Operator's records, or

ii) Estimate of the maximum Gross Receipts (or income). Gross receipts can be calculated by applying the actual berthing tariff rates to the "Maximum Lettable Length" of marina berths (net of VAT) or in the absence of such information, from the Tariff rates published in the Royal Yachting Association (“RYA”) Marina Guide 2007 with uplifts to 2008 figures in line with comparisons between these and known 2008 rates.

And PL thought he was hard done to with a 9% NAA ?

.

Edited by Alan de Enfield
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I imagine that the reason PL continues in employment is that he is the fall-guy. It seems rather unlikely that he was the brains behind the scheme to avoid paying the accumulated access charges, but he has taken all the flak, while Mr Steadman sits quietly at home perusing the Financial Times.

 

Monkeys and organ grinders come to mind, or even ventriloquists and their dummies. While attention is focused on the monkey/dummy, the organ grinder/puppet master can mature his little plans unobserved.

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To be precise, we can't be absolutely certain that the restaurant is losing money without seeing the books, but based on the little we hear, i.e. people observing it to be near-empty at various times, it very probably is losing a lot.

 

I've always understood that in any employee profit-sharing scheme, if the business makes a loss in a particular period then the scheme pays nothing out and the loss comes from the business's bank account or loans. But then I guess you're thinking that this is Pillings Lock we're talking about.

 

My guess is that if PLM goes on as it is, the restaurant will steadily leak money until it's closed to stem the losses. Meanwhile there will be enough income from mooring fees to cover marina running costs, plus, by whatever circuitous financial route is now used, paying an interest-only mortgage (and NAA fees if CRT bothers to force them), so PLM can survive but without giving Mr Steadman much of a return on his investment. Their strategy seems to be to attract moorers by offering cheap rates; I think a typical fee of £1299 for a narrowboat was mentioned? At that price I suppose some people will bite, especially if they are unaware of the history, and PL learns to restrain himself from antagonising people.

 

The vague estimates I'm using here excluding the café, and of course it's all guesswork, are:

Moorings: 240 boats at an average of £1300 = 312,000

Wages (inc. tax & NI): PL 60,000 plus maybe 2 low-paid minions, total 100,000

Mortgage: 5% interest on 2,000,000 = 100,000

VAT is one sixth of mooring fees, so 52,000

NAA (optional at Pillings Lock) 31,000

For simplicity I've assumed that they break even on extras such as pump out, electricity etc.

There may also be some income from the flat and the workshop.

Debating the above figures could of course keep this topic going for a while...

 

So a profit of perhaps 29,000, very much dependent on the numbers of boats; I've assumed that on average 40 of the 280 berths will be vacant. Drive 30 of those 240 away and the marina is losing money.

Conclusion for PL: Make an effort to be nice to people all the time, and if the café can't make money adapt or close it PDQ.

 

Peter - Looking at this chart of the PLM mooring fees it would appear that your estimate of the rental income is a bit low. Also, VAT is added to the mooring fee, so VAT is not an expense as such because it is paid by the moorers.

 

And then there's the income they won't get from the leaseholders that paid in advance.

 

Your basic premise about the bottom line is probably sound, though. Even if there is substantially more income than you calculate, there are substantially more expenses too.

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No, your thinking is confused.

 

The sale value adds to the bottom line, whilst the cost reduces it. It's the net figure that adds to the bottom line.

 

ALL costs, (other than capital items, which technically aren't a cost in the usual P&L sense) come off the bottom line ultimately, although they might first (as in your example) have come off gross profit.

 

And most capital expenditure will also come off the bottom line over time in the form of depreciation.

Pedantic perhaps but the net figure (sales minus cost) is the bottom line...

 

 

 

Paul, please don't waste my time with facile nonsense.

Surely only you are wasting your time by responding to PaulG's 'facile nonsense'

 

 

If you didn't buy the item at all, you could not sell it. The bottom line would be reduced.

Therefore (as I said), the net effect of the cost is to increase the bottom line.

You can't just lump direct and indirect costs together and pretend they are all the same.

Not sure what you are thinking here... Or are you just popping at George94?

 

At its most basic, revenue is revenue, cost is cost whether direct as in cost of sales or labour or whether indirect as in variable or fixed costs. The bottom line is simply revenue minus cost.

 

There is no net effect of cost - there can't be a net effect of a single item. The net effect (whether at gross profit or at operating profit level) is simply the result of revenue minus cost.

 

ETA

missed word in last line...

Edited by happynomad
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Pedantic perhaps but the net figure (sales minus cost) is the bottom line...

 

 

Surely only you are wasting your time by responding to PaulG's 'facile nonsense'

 

 

Not sure what you are thinking here... Or are you just popping at George94?

 

At its most basic, revenue is revenue, cost is cost whether direct as in cost of sales or labour or whether indirect as in variable or fixed costs. The bottom line is simply revenue minus cost.

 

There is no net effect of cost - there can't be a net effect of a single item. The net effect (whether at gross profit or at operating profit level) is simply the result of revenue minus cost.

 

ETA

missed word in last line...

 

Thank you for lifting the burden from my shoulders. You are of course correct in everything you said above.

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Thank you for lifting the burden from my shoulders. You are of course correct in everything you said above.

Actually you are both wrong.

 

There is a world of difference between direct and indirect costs.

 

On a conventional profit and loss account, the first item is company's sales. Then the cost of sales (the direct costs) are deducted to arrive at the Gross Profit of the business.

 

Below this will be the indirect costs, overheads, or whatever you wish to call them.

 

My point was, before the stone-throwing started, is that to compare the Pillings loss to CRT's total costs understates the impact on the business.

 

If anything, it should be viewed relative to the indirect costs of the business, which will arrive at a larger figure.

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Actually you are both wrong.

 

I certainly wasn't throwing stones and I rather hope I am not wrong... If I am then my entire career has been a complete sham and I need to get out of it before I am rumbled.

 

Perhaps you would be so kind as to point out where, in the context of what I said, I am wrong...

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I certainly wasn't throwing stones and I rather hope I am not wrong... If I am then my entire career has been a complete sham and I need to get out of it before I am rumbled.

 

Perhaps you would be so kind as to point out where, in the context of what I said, I am wrong...

You are quite correct, you were not throwing stones, and I did not intend to infer that you were.

I feel that we have reached the limit of how many times a hair can be split, and so I am going to do the forum members a favour and desist from further argument on this subject!

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Bitching?

 

I am nor sure how wanting a level playing field can be described as bitching. It seems perfectly reasonable to me.

You are entitled to your opinion, George.

However, the facts are very simple. If you want to open a new marina, you must compensate CRT for the income that they lose by taking moorings off line.

If you don't like it, don't open a marina.

  • Greenie 2
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at least the CRT don't agree a contract, then half way through increase the prices, like gas or electric companies, or Orange mobile, or SKY TV etc etc etc ......


at least the CRT don't agree a contract, then increase prices willy nilly afterwards, like gas and electric companies, Orange mobile, Sky tv, etc etc etc

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You are entitled to your opinion, George.

However, the facts are very simple. If you want to open a new marina, you must compensate CRT for the income that they lose by taking moorings off line.

If you don't like it, don't open a marina.

 

If that were true, there would be no argument. It wouldn't be called a Network Access Agreement, but a Lost Moorings Compensation Agreement.

 

But is it true, in every case, that BW removed a number of moorings sufficient to justify the size of the NAA charge?

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If that were true, there would be no argument. It wouldn't be called a Network Access Agreement, but a Lost Moorings Compensation Agreement.

 

But is it true, in every case, that BW removed a number of moorings sufficient to justify the size of the NAA charge?

 

They can call it anything they want!

 

It is called a Network Access Agreement, because access to the network is what it gives. How the charges are set is irrelevant to the name (but relevant to showing that the charges are reasonable).

 

And in terms of moorings removed, a list was published in this thread several hundred pages back. Go and look for the list.

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If that were true, there would be no argument. It wouldn't be called a Network Access Agreement, but a Lost Moorings Compensation Agreement.

 

But is it true, in every case, that BW removed a number of moorings sufficient to justify the size of the NAA charge?

 

The moorings that CRT remove when a new marina opens are a matter of public record.

There's a link to a page that contains a list of all moorings removed between 2006 and 2010 below:

 

http://www.tyha.co.uk/NewsDetail.asp?N_ID=88

 

Having shown that this is true, I trust that you now accept that there is no argument!

 

(edited to correct grammar!)

Edited by PaulG
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Yes George, he is "bitching" and proving again how ill-informed he is. The Trade Association for marinas have agreed this charge with CRT so they are obviously happy with it. But of course Pillings isn't a member of that Association, is it? I wonder why not?

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