Revaluation postponement will hit retailers, say agents

PROPERTY agents have hit out at the Government’s decision to postpone the next business rates revaluation until 2017, saying it will add more pain to struggling retailers and widen the North-South divide.

A revaluation was due in 2015, linking rates to rents in 2013, but the postponement means companies will have to pay business rates based on rents in 2008 – at the height of the market – until 2017.

The Department for Communities and Local Government said the measure will ensure firms don’t face unexpected hikes in their business rate bills over the next five years. It has been accused of protecting a significant source of income.

John Hayward, head of rating at Leeds-based chartered surveyor’s Eddisons, said the decision was completely unexpected and badly thought out.

Mr Hayward said: “This delays any hope of rateable values being realigned with lower rents, as opposed to current rateable values, which are based on rents in 2008, when the market was at its peak.

“It is incredible that the Government think they are supporting businesses by giving them certainty, when in the vast majority of cases they would be paying significantly less in 2015, when the revaluation was due to take place.

“Business rates are a significant bottom line cost to all businesses and this announcement will do nothing to help them, particularly given the tough trading conditions currently being experienced.”   

Dunlop Heywood rating director, Stuart Hicks, said: “Overall, the revaluation would not have led to a fall in tax revenue because the Government would have altered the rate in the pound to compensate.

“The result of postponing the revaluation is really to prevent the tax base being reset. This would have allowed areas that have suffered as a result of the recession – i.e. secondary retail and geographical areas such as Yorkshire, the East Midlands, the  North West  and the North East – benefiting and being supported by lower rateable values.”

Paul Manning, GVA’s head of business Rating in Leeds, added: “It is surprising that a decision like this has been made at a time when the most challenged of ratepayers are pleading for government to help them ride out the worst economic crisis in modern times.”