The Government’s decision to postpone revaluation of business rates for two years has been lambasted by business organisations across the UK.
Harrogate commercial property expert John Webster of national property consultants Carter Jonas agrees that it will further add to the struggles of Yorkshire retailers.
Rates were due to be revaluated in 2015 but the deferment until 2017 means businesses will have to pay rates for a further two years based on values in 2008 when the market was at its height.
John Webster said:
I am sure most businesses, particularly retail, would rather put up with upheaval and uncertainty if their rates fell as a result, than stick with the current rateable values for a further two years and find themselves overpaying.
This is a real blow to market town high streets as business rates are too high, being based on pre-recession rents.
The 2015 revaluation was necessary in order for business rates to be adjusted in accordance with current local retail trends and the national economic situation and for the revaluation to be delayed for a further two years will not assist High Streets in dealing with the current level of high vacancies.
The Government’s rationale that it will assist businesses in my opinion is misguided and not supported in reality.
Announcing the postponement, Brandon Lewis, Parliamentary Under Secretary of State for Communities and Local Government, said:
Business rates are local firms’ third biggest outgoing after rent and staff costs and the postponement will avoid local shopkeepers facing unexpected hikes in their rates bill over the next five years.
As business rates are linked to inflation, there will be no real term increase in rates over this year. A revaluation at this point would be likely to result in sharp changes to business rates bills in many parts of the country and in many sectors.
Mr Lewis said the Government was committed to maintaining up-to-date rate bills through regular five yearly revaluations, due to resume after 2017.