North West lost out on £680m rates saving, says GVA
Bilfinger GVA has calculated the cost of the Government's two-year deferment of the business rates revaluation, which was due to occur in 2015 and would have seen a £682m reduction across the region.
The review by the commercial property advisor calculates what the 2015 revaluation would have looked like if it had taken place when it was originally due on 1 April 2015 and compares this to what businesses will instead have to pay over the course of the deferment.
Had the revaluation not been postponed, the Total Rateable Values in the region would have fallen from £6.682m to £5.270m, a fall of 21%. The impact of this on North West ratepayers is that an estimated easing of the total business rates collected in the region of approximately £682m will not occur.
The findings also suggest that over the same period London businesses will actually benefit by more than £1.5bn. However London businesses can therefore expect to be hit very hard when the deferred revaluation is carried out in 2017.
GVA said that current rating liabilities are valued against the backdrop of the market in April 2008, just before the onset of the economic downturn, a level that large swathes of the market are still yet to return to. As a result 'the current rating system has become badly disconnected from the economic landscape, and left business crying out for changes to create a fairer system'.
Bilfinger GVA forecasted that the 2017 revaluation UBR will rise to 51.2p, with rateable values 3% lower across England compared to 2010. It will be the first time for 22 years that the multiplier will not fall because of the revaluation.
Duncan Harkness, senior director in Bilfinger GVA Manchester's business rates team, said: "The research piece by Bilfinger GVA shows the harsh reality of the implications for North West ratepayers of the Government's decision to postpone the 2015 rating revaluation for two years.
"While businesses in the South East, which should have seen significant increases in rates bills, have been cushioned from these increases, the cost of this subsidy has been borne by ratepayers in the regions. The North West occupiers have been hit hardest, having to subsidise more affluent areas to the tune of an estimated £682 million pounds over the next two years."
