14/3/16 – The ever growing burden of Business Rates

By Myles O’Brien, Group Director and Head of Business Rates

Rates have become an ever growing burden for business’ outstripping other taxes (source: CBI / Office of Budget Responsibility). Despite calls to reform business rates, as the Exchequer raises £32bn per annum from commercial property like yours, there is no intention to change this tax.

Although some reform is needed with over 300,000 appeals still unresolved by the Valuation Office it will be restricted to the administration process alone. However, these reforms will see ever increasing legislative barriers to appeals and with Local Authorities set to try to avoid any reductions in their incomes under the ‘Localism Act’, the burden looks set to rise even further.

We have responded to the Department for Communities and Local Government consultation on the reforms to try to influence the outcome and have asked for a reduction in the barriers that are currently mooted. The final review will be published next month and we will report back to you on this in our next newsletter.

 

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What does the Future look like after the 2017 Revaluation?

The new draft Rating list is due to be published in October 2016 at which time we will know the new Rateable Value for all commercial properties.  The headlines to this are:

The multiplier is set to rise above 50% – reaching 50 pence in the pound, levels not seen since 1990 when Rateable values were much lower than they will be in 2017.

Winners and Losers – with locational hotspots and regional variations, London is set to see increases in most sectors, especially offices and leisure, whereas the North of England will generally not see increases anywhere near it’s more Southerly neighbours.  Nonetheless, due to the vagaries of ‘Transitional Relief’, businesses will not feel the benefit of lower Rateable Values, as bills will be kept artificially high to minimise drop in revenues.

Offices – will increase and in certain locations will double.

Retail – will polarise; the best locations will be hit hard, the middle ground will get squeezed and poorer locations will again have to rely on Local Authority reliefs to stay afloat.

Industrial – will not be hit as hard as many other sectors, but again, due to Transitional adjustments (Downward Phasing), where RVs do stay at similar levels or even fall, bills will be kept artificially high.

Leisure – will see significant change especially in sectors such as hotels and restaurants.

What can we do to help?

We are here to help you with budgeting advice and assist with auditing the new bills as:

New Bills for 2016 arrive in March; We often find errors in Billing Authority liability calculations.  Send us a copy of your rate demand(s) to the email address below, so that we can audit them for you.

In view of the forthcoming changes, it may be difficult for you to budget your rates liability in 2017.  We can provide you with a calculation of your 2017/8 liability from October 2016 so you can budget for future changes.  Please give us your consent for us to continue to act for you on the 2017 Rating List – Sign today so we can help prepare your business for the new Revaluation.  Send a request to the email address below.

Forward any enquiries, rate demands or request for a new 2017 consent form to: rating@argroup.co.uk or telephone 01727 843232.

 

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