Councillors have agreed to tax three seafront businesses, despite objections from one of the business owners.

Lyme Regis Town Council meet last week to decide whether to tax - for VAT purposes - Lyme Regis Amusement Arcade, SWiM and Lyme Regis Antique and Craft Centre.

George Symonds, owner of Lyme Regis Amusement Arcade, attended the meeting, claiming this was borderline tax avoidance by the town council and he would ‘fight it tooth and nail’.

He said: “It is an appalling underhand way this has been handled that nobody from the town council office has contacted me or any other people. It’s trying to put something through without any feedback - I think it is extremely underhand, that is very poor in my opinion.

“You are trying to charge VAT on my rent, that’s 20 per cent, which will increase my rent by more than £9,000.

“I’m sure in your report it explains in detail about Machine Games Duty. I am VAT registered but one of the stipulations of Machine Games Duty is you can’t claim [VAT] back.

“You are trying to claim the VAT back from your tenants. This is actually on the borderline of tax avoidance. You have had 20 years of charging no VAT and now all of sudden, because you want to do a job on those shelters, you want to charge your tenants VAT, tenants that have been loyal to you for a period of time. If that doesn’t come near tax avoidance, I don’t know what does.

“I am not going to lie down and try to find £9,000, I’m going to fight it tooth and nail.”

Machine Games Duty is paid if there are machines that give cash prizes. It is paid on the total net takings from the machine games. The takings from machine games are exempt from VAT if Machine Games Duty is paid.

Town clerk John Wright explained that the council needed to have a decision of what it wanted to do before talking to the tenants.

Mr Symonds added: “I think it would certainly be good manners to actually come to somebody and say this is our intention. I hope it’s got in your reports in detail about Machine Games Duty, if it hasn’t, that report is fraud.”

The council wants to carry out maintenance works to the roof of the shelters’ building, which was also reported at the meeting would cost more than the council’s budget of £400,000.

Mike Stainer, the council’s finance manager, said: “We’re looking at the decision to charge VAT, or to opt to tax these buildings for VAT, because we have a larger amount of expenditure on these buildings, with the associated VAT that can’t be recovered unless these buildings were opted to tax.

“It’s a reasonably black and white decision of who pays the bill.

“The last time we had to consider this as a council was about 10 years ago when the Boylos/National Trust buildings were put up with the shelters above it. At that time, there was some advice taken that said you need to opt to tax these buildings, otherwise you will be passing the VAT bill portion of that to the taxpayers of Lyme Regis.”

The item came under exempt business so was discussed without the public or press present, but the council opted to tax, for VAT purposes, each of the three properties.

Mr Wright 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.”