Rates could fall by half for owners
New rateable values will leave firms better off – but more pain to come
COMPANIES in parts of the West Midlands will see their business rates fall by more than half from a Government shake-up, it has been revealed.
Businesses in Tamworth will see their bills fall by 56 per cent when new rateable values are introduced in April 2017, while there will be savings of more than a third in Northfield, Kings Heath, Kidderminster and Bromsgrove.
Businesses, particularly retailers, have been hit hard in recent years as business rates have continued to rise despite falling property values in vast swathes of the country.
However, with the Government planning business rates rises, there is likely more pain on the way for companies.
The vast disparity in parts of the West Midlands, unveiled by Colliers International research, comes amid calls for a fundamental reform of business rates to boost productivity.
A total of 95 out of 100 retail bosses surveyed by the British Retail Consortium (BRC) recently said that a reform of business rates would boost the nation’s productivity.
John Webber, Colliers International’s head of rating, said regional retailers can finally see some relief on the horizon after years of over-paying.
Values taken on April 1, 2015 will come into effect on April 1, 2017, and Colliers has unveiled the disparity that currently exists by comparing present rates with the Valuation Office Agency (VOA’s) current values.
Mr Webber said: “The huge swing in values is due to the Government postponing the revaluation, which was meant to commence this year, so instead of having a five year cycle we now have a seven year cycle. This long delay in revaluation is like stretching a rubber band, which when it snaps has a significant impact. The effect is evident that we need shorter revaluation cycles, perhaps of about three years, in order to capture the rapidly changing relative values.”
Tamworth is in the top three of towns in the UK set to benefit from the reduction in business rates, while Kidderminster and Bromsgrove, where businesses are set to enjoy a 42 per cent relief, are also in the top 20.
Other parts of the region which will enjoy a major boost are Halesowen, Nuneaton and West Bromwich. Colliers examined 421 centres following work beginning on the revaluation.
Business rates, which date back to 1601, are currently calculated according to rental values.
They are forecast to bring in £28 billion to the Government this year – its sixth largest stream of revenue after income tax and national insurance.
George Osborne announced in the summer Budget that retailers would face a £4.9 billion increase in business rates – equivalent to 17.5 per cent – by 2020.
However, the Government’s “business tsar” has called for a fundamental reform claiming business rates are harming Britain’s productivity.
Sir Charlie Mayfield, chairman of the John Lewis Partnership and BRC president, said: “Business rates bills have continued to rise when property values have fallen. Retailers are now paying £2.40 in business rates for every £1 in corporation tax,” he added. “Reforming the rates system would be a welcome boost for retailers and help drive investment in training and technology.”