George Osborne used his Budget to announce a root and branch investigation of how to change the system which sees 1.8million business in England paying rates which experts have warned are “crippling” small firms. The review will also help high street shops struggling to compete with online retailers.
Rob Redgrave who Heads Miller Commercial’s Commercial Department says “The present system does not provide enough flexibility to react to market conditions.
For example there shops close to the city centre in Truro that have been empty for a significant period of time predominantly because the rates are higher than the rent.
The businesses affected are those which fall in the ‘no man’s land’ between smaller premises which benefit from small business rates relief and the larger premises occupied by national retailers who can theoretically afford to pay their rates. So it’s the medium sized shops occupied by local operators who get no assistance whatsoever.
In Cornwall these size and type of retailer would be located in the secondary shopping areas of Truro and the edge of the primary shopping areas of towns like Falmouth, Newquay and St Ives.”
This week’s budget announcement follows widespread criticism of the current system, where rates are charged to retailers based on the value of their shop or other commercial property.
Current valuations are still based on property prices in 2008, before the economic downturn not the value of commercial real estate.
Rob says “At present you get 100% business rates relief for properties with a rateable value of £6,000 or less.
Then there is a tapered relief which gradually decreases from 100% to 0% for properties with a rateable value between £6,001 and £12,000.
I would suggest widening the band of relief to an upper limit of double that to £24,000. This limit is low enough to exclude national and multi-national operators but high enough to benefit the independent retailers who are crucial to the vibrant mix of businesses that is so needed in our local town centres.”
