Businesses across England and Wales will see their business rates bills change drastically thanks to a new revaluation.
The change has been met with widespread criticism in the press, with pubs and restaurant chains leading a campaign to have increases in bills either scrapped or moderated.
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But in fact, while some businesses will lose out as a result of the revaluation, others will see their bills fall. So who are the winners and losers in the business rates change?
Why are business rates changing?
The revalution is the first since 2008, and comes in the wake of rocketing property prices in London and the South East. The government says that the change must be made in order to ensure that businesses’ rates bills accurately reflect the real rateable value of their properties.
They also point out that the method for revaluation has been agreed by a number of major trade bodies, including all of the leading trade groups in the pub sector.
Who are the business rates winners?
While property prices have risen in the South East, they have either remained static or even fallen in other parts of the country. Last week, the Financial Times reported on a pub chain in the north and the Midlands consisting of 350 outlets, half of which will now pay no rates at all thanks to the revaluation.
Mark Davies, head of the New River group, told the paper: “London has been subsidised by the regions for some time now. This is good news. It is a fair tax on current property values. We don’t have pubs on the King’s Road or Notting Hill. These are local pubs that are vital to their community.”
A separate report by Colliers International suggests that some 324 retail centres across the country will see their rates fall. They cite Newport, in South Wales, as one of the prime examples, where rateable values may drop by around 71 per cent. Lowestoft in Suffolk, they say, will see values drop by 41 per cent.
And who are the losers?
However, the picture is not so rosy in London and the South East. As we reported earlier this month, a group of restaurant and pub chains have written to the Chancellor asking for action to stop the increase in their rates bills, which they say could reach over 40 per cent. They claim that the revaluation could cost the hospitality sector around £500 million.
The Colliers report, meanwhile, suggests that around 76 retail centres will see their rates rise, with the sharpest increase coming in the West End’s Dover Street – an increase that Colliers say could top 400 per cent.
Businesses in Brixton, the report suggests, could see their rates rise by 128 per cent, while those in Shepherd’s Bush Westfield could see an increase of 102 per cent.
Why is this happening now?
The latest revaluation has been put off by the government, which has come under pressure from business groups. However, it says it has been forced to act now in order to take into account rapid increases in property prices since 2008.
But there will be some respite for businesses that see a hike in their rates. Under a transitional scheme, some businesses will get a cap on increases year on year, an arrangement that the government says will apply to around 600,000 firms.
Are you seeing your business rates change? Let us know in the comments.