Business rates correction on its way at last: the winners and losers?
It is going to be a good few months before we will all find out what our business rates are going to look like after the 2017 Rating Revaluation, but the long awaited correction is finally on the horizon.
Many retailers in London and the South East can expect much higher business rates after enjoying something of a windfall over the last couple of years thanks to the revaluation postponement. However, the good times couldn’t last forever and, while the Government should have assessed three quarters of properties by January in the first revaluation since 2010, retailers will only be informed of their new draft rateable value next October.
The 2017 rating revaluation will produce the most amount of controversy that we have seen in possibly decades and, according to a new report out this month, around 324 retail centres across Britain will see business rates decrease, while 21 will pay the same amount.
That leaves about 75 retail centres in the UK facing a rates’ increase, the majority of them concentrated in London and the South East. Outside of London, it looks like Marlow will be the biggest loser in the South East with a 58 per cent increase, followed by Guildford at 42 per cent. Newport in South Wales is cited as the UK’s biggest winner, with an 80 per cent cut on the cards. Closer to home Rochdale should see a welcome decrease of 30 per cent come 2017.
Looking into Central London there are still some anomalies here with tenants on Tottenham Court Road seeing a 12.4 per cent decrease in business rates, in sharp contrast to Oxford Street, with properties to the west nearer Marble Arch, suffering a 59 per cent increase in the tax. Heading east, business rates bills are set to drop again by around 19 per cent. Still in London, it’s Dover Street which is set to be the biggest loser with an increase of 415%. Brixton faces a potential 128% increase in RV but Ealing will see a decrease of 46%.
Not surprisingly the winners are mainly in the Midlands and North of England but the variations really across the country are quite staggering.
The government has promised a review of the current system and will deliver its findings by next year’s Budget. Business rates are expected to raise around £28bn for the Treasury this year, more than the sum it raises in council tax.
Tory peer Lord Wolfson has said that business rates need to be updated to reflect major changes in retail.
Should relegation from the Premier League be classed as a Material Change of Circumstances when it comes to rating?
Now that I have written about Wales recently it’s only fair I switch to our more northerly neighbours.