Business owners across the UK are bracing themselves for the largest changes to business rates for a generation – bigger than Brexit, according to Colliers International, the global commercial real estate agency and consultancy.
Draft rateable values will be published on Friday 30 September by the Valuation Office Agency (VOA), giving every business the latest figure from which they can calculate their business rates bill. In recent days, the government has published other data (transitional relief and multipliers) that enables ratepayers to calculate their business rates liability from next April.
Owing to an administrative website error by the VOA on Tuesday, tens of thousands of ratepayers new rateable values were accidentally made live on the VOA website for a brief period.
All regions of the country except London can expect business rates reductions. Specific rateable values seen by Colliers International show some North East reductions of 65 per cent.
However, the best shopping streets in London can expect unprecedented rates’ rises. Bond Street will climb over 100 per cent with Westfield White City braced for 62 per cent rises. Colliers is also able to reveal 50 per cent rateable value increases for some of the floors in The Shard. London Regent’s Street can expect close to 40 per cent increases for the prime retail locations whereas Euston Tower can expect between 30 and 40 per cent increases in rateable value.
John Webber, Head of Rating, Colliers International, said:
“The government is making it clear that three out of four business rates bills will stay the same or fall. But they are not falling enough. Some depressed parts of the UK should be expecting 40 per cent reductions in business rates: these latest proposals mean they will only see a fall of two per cent next year. Likewise, we were expecting increases in London, but our models didn’t include three-digit increases in two years for some parts of central London.
“By limiting the downward transition for much of the country, depressed areas already buckling under their business rates’ bills will struggle to see the much-vaunted government ‘fairness’ in these business rates figures.”
Webber continues:
“We will be lobbying government for a more generous upwards transition scheme and the abolishing of the downward transition scheme in order to soften the blow of these new rateable values published on Friday. This mess is of the government’s making when they decided to postpone the revaluation: they need to put their hand in their pocket and do the right thing for vast swathes of the country.”
“The reality is that when you scratch beneath the surface of the government’s well-oiled and well-timed PR machine, what is revealed are small reductions for the majority and massive increases for London which is a rates disaster. These are the largest changes for a generation: bad for business and bad for growth in this post-Brexit world.”
The publication of rateable values and proposed transitional relief come hot-on-the-heels of further proposed reforms which will all but remove the ability of business owners to appeal their business rates’ bill.
Webber continues:
“This clear infringement of a rate payer’s right to appeal their rateable value must not be allowed to form part of the government’s business rates’ appeals’ whitewash. We shouldn’t forget that 300,000 businesses are still awaiting decisions about appeals lodged up to seven years’ ago. These proposed regulations are extremely draconian.
Colliers has said previously that “the government’s decision to delay the last revaluation will come home to roost with massive business rates hikes across London and the South East. This will leave HM Treasury with no alternative except to introduce significant relief to ease the pain.”
Colliers Manifesto for Business Rates Reform:
1. More frequent revaluations, three-yearly, at least, by 2022;
2. Increase funding for VOA in order to deal with existing appeals’ backlog;
3. Release VOA from pressure exerted by local councils and HM Treasury;
4. Introduce a register of appeals professionals – removing the ‘cowboy’ element;
5. Iron out inequalities where small business pays a higher proportion in business rates;
6. Root and branch reform of current business rates exemptions and reliefs.
