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08/12/2015

Retailers need to plan for business rate changes now

Words: Laura Edgar
Brixton

London and the South-East face increases in business rates whereas the rest of the UK is expected to see reductions, according to research.

Business Rates: How The 2017 Rating Revaluation Will Affect High Street Retailers (pdf), by Colliers International, a real estate services organisation, considers 431 retail centres (in-town high street shops and shopping centres) across the UK.

It suggests that 324 retail centres will see a decrease in business rates for retailers, while 21 will experience no changes.

But 76 retail centres will see increases, with researching indicating that the “only losers” under the new business rates regime will be those in London and the South-East.

Fashion mecca Dover Street in central London, will, says the report, be the UK’s “biggest loser”, as rates are expected to go up by 415 per cent. Brixton, London Westfield and Southall are also expected to see rises. Marlow, in leafy Buckinghamshire, is expected to see an increase of 58 per cent.

Top 10 UK winners with business rates reductions:

Newport: decrease of 71.29 per cent

Port Talbot: decrease of 63.51 per cent

Tamworth: decrease of 55.84 per cent

Neath: decrease of 55.67 per cent

Weymouth: decrease of 50.66 per cent

Ealing: decrease of 46.18 per cent

Torquay: decrease of 44.80 per cent

Pontypridd: decrease of 43.84 per cent

Dewsbury: decrease of 42.59 per cent

Llanelli: decrease of 42.12 per cent

On the other hand some areas of the capital will see decreases in business rates, such as Floral Street in Covent Garden, which is expected to see a 17 per cent fall, and Fleet Street, which is expected to see a 13 per cent drop.

Newport in South Wales is expected to see a 71 per cent decrease, making it, said Colliers International, the UK’s “biggest winner”.

Business rates are a tax based on the value of a property and are usually revalued every five years. However, this year revaluation was postponed until 2017. The last one took place in 2010.

John Webber, head of rating at Colliers International, said: “The 2017 rating revaluation will produce the largest changes to business rates for High Street retailers in a generation. We now understand that the bulk of assessments have been made and local councils are very nervous about widespread reductions in business rates revenue.”

Webber said Colliers International’s message is clear. “Retailers need to start planning for these changes.”

Those in London and the South-East will in some cases face “significant” rate rises and therefore need to budget to allow for this now. Those who can expect a decrease in business rates should, Webber said, be clear about rate liability.

“This knowledge offers leverage for both landlord and tenant when it comes to rent negotiations. Retailers who could be sleepwalking into rates changes are threatening the sustainability of their stores. We strongly urge them to wake up and act to protect their shops and the jobs which rely upon them,” he concluded.

Image credit: iStock

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