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Households and some Businesses in Northern Ireland look likely to suffer for councils’ difficulties in controlling their budgets

14 02 20 business rates ireland

Northern Ireland Revaluation 2020 likely to lead to increase in rates bills in many districts says Colliers


Most households and some businesses in Northern Ireland should see some steep rises in their rates bills from 1 April 2020, following the publications of the District Rate Poundages, according to Business Rates experts at Colliers International, the global property consultants.

In Northern Ireland, District and Regional Rates Poundages are used together with NAV for business premises, and Capital Value for domestic premises, to calculate the actual bills for businesses and domestic premises. Whilst district poundages were announced today, regional poundages are due in approximately one month.

Last month Land and Property Services (LPS) published its draft Revaluation List figures for all 74,000 non-domestic properties in Northern Ireland for the new 2020 Valuation List.  Based on April 2018 rental values this showed a 6.8% rise on the 2015 List values (based on April 2013 rental values).

New District Rate Poundages formally announced today may in some cases cause rates bills to increase further.

Indeed, the figures show (see table below) that it will be costly for individuals following the Revaluation. Every district council in Northern Ireland has confirmed it will be increasing its Domestic District Rates Poundages. A minimum increase of 1.74% and a maximum increase of 7.65% on the previous year’s poundage has been announced for the 2020/2021 rating year across the various district councils. This will add to the pain of many ordinary people, facing higher bills in a period of economic uncertainty.

For Non-Domestic rates payers, the picture is more mixed. Three district councils (Ards and North Down & Mid, East Antrim and Causeway Coast and Glens) are increasing their district rate poundages (by 0.87%, 2.9% and 0.01% respectively), two are keeping theirs at the current 2019/2020 level (Lisburn and Castlereagh and Fermanagh and Omagh), whilst the remaining authorities are reducing their poundage.

The largest decrease in Non-Domestic District Rate poundage is in Belfast, which reduced by 5.4%. However, since Belfast has had one of the largest rises in rental levels since the last valuation, these two factors together mean rate payers are unlikely to get a reprieve or lower bills upon publication of the Regional Rate and new Rates bills from 1 April 2020.

DISTRICT RATES 2020/2021

 

 

District Council

 

Non-Domestic District Rate

Pence

 

%

Change on Previous Year’s Poundage

 

Domestic District Rate

Pence

 

%

Change on Previous Year’s Poundage

Antrim & Newtownabbey

24.0426

-3.6

0.003649

+1.98

Armagh, Banbridge and Craigavon

25.4413

-2.5

0.004419

+2.48

Belfast

25.9166

-5.4

0.003394

+2

Causeway Coast and Glens

24.8603

+0.01

0.003900

+7.65

Derry and Strabane

30.3794

-2.3

0.005009

+3.38

Fermanagh and Omagh

21.8231

No change

0.003668

+2.8

Lisburn and Castlereagh

22.6611

No change

0.003158

+3.98

Mid and East Antrim

30.9186

+2.9

0.004371

+1.74

Mid Ulster

23.4749

+4.6

0.003373

+3.24

Newry, Mourne and Down

23.6209

-2.6

0.004004

+2.85

Ards and North Down

23.1730

+0.87

0.003446

+5.64

 

Some areas, such as Ards and North Down Borough Council, have been tough on both individuals and businesses. This council which traditionally delivered one of the lower District rates Poundages in Northern Ireland, has agreed a domestic rate of 0.003446p in the pound – an increase of 5.64% on last year’s domestic district rate poundage. This equates to an increase of approximately £2.19 per month for the average householder.

Furthermore, Ards and North Down Borough Council have announced a non-domestic district rate of 23.1730p in the pound - an increase of 0.87% on last year’s district rate poundage in a borough where businesses are struggling.

Taking Ards and North Down Borough Council as an example, applying the non-domestic district rate to the current Regional Rate of 0.3401, Colliers has calculated that this equates to a poundage of 57.18p in the pound in total. If the regional rate announced next month also increases, this rates bill figure will rise further with effect from 1 April 2020.

The Council which justified its poundage rise said this was due to a national pay award, the planned repayment of recent loans to fund capital investments in the Borough and the need to strengthen the Borough's reserve fund. "This rise will enable us to protect service quality, secure critical capital investments and deliver our economic ambitions for the Borough”.

Another district Council where poundage increases are high is Causeway Coast and Glens Borough Council which has seen a domestic rates increase of 7.65%. This rise has been struck in order to address a £7m funding deficit for the next year.

David Hughes of Colliers International, based in Belfast said,”We were advised that any rates increases would be inflationary –but the above seems to fly in the face of that in many district councils. Rises for domestic ratepayers are significant and on the business side in particular,  the total multiplier looks likely to be nearing 60p in the pound for several councils. Businesses that have already been suffering as a result of Brexit uncertainty and increased costs may find this another burden to bear. We will be looking to assist our clients wherever possible as a result of this.”

John Webber, Head of Business Rates at Colliers International added, “Although the business rating system in Northern Ireland is very different to Great Britain's, with five yearly valuations and an even more complicated appeals system, the elephant in the room in both places remains the multiplier. At over 50% in England and Wales, this is an eye-watering 60% plus in some areas of Northern Ireland, and should the regional poundage rate rise further, as expected this could be crippling to businesses. As in the rest of the UK, we need decent business rates reform in Northern Ireland and taxes that encourage rather than punish businesses.”


Related Experts

David Hughes

Senior Surveyor

Business Space Lease Advisory

Belfast

David is a Senior Surveyor within the Colliers Professional Services Department. 

Since joining Colliers International he has advised on rent reviews, lease renewals, lease restructures and Non-Domestic Rating work on behalf of a number of landlord and tenant clients.

View expert

John Webber

Head of Rating

Rating

Birmingham

I have over 30 years’ experience in the rating industry and lead a 90 plus rating team at Colliers International.  When I took over responsibility for the team in 2005, it consisted of only a dozen people and has now grown into one of the leading rating advisory teams in the country.  I am a member of Colliers International Management Executive as well as sitting on the company’s promotion panel. 

I am regularly called upon by the national media to give my views on a range of business rates issues and I am vocal commentator on the 2017 Revaluation.

I started my career in the Valuation Office Agency in Kidderminster.  I joined Gerald Eve in 2000 where I spent 10 years before moving to Gooch Webster (now Colliers International). I sit on the National Retail Panel of Rating Surveyors Association which provides guidance on how the RSA town committees work with the VOA and valuation matters.  John sits on the RICS Rating Diploma Committee having passed the prestigious qualification in 2014.

Philip Harrison and I founded 'Accurates' in 2007, the Collier's Compliance and Audit team, which although forms an integral part of the Rating Team is now a leading brand in its own right.

View expert

Hannah Zitren

Associate Director

Marketing & Communications

Manchester

Currently on maternity leave.

As PR manger in the UK, I am responsible for media relations and generating coverage in top tier media. I work across a range of Colliers’ UK & Pan-EMEA business lines (residential; licensed and leisure; planning; hotels; retail; healthcare and automotive) advising on their strategic and tactical PR needs.

My role includes:

·         Developing and executing PR plans for the various business lines to help promote their key messages across all aspects of the media - print, broadcast and social.

·          Media evaluation and reporting objectives, targets and successes across the business.

·         Reputation management and crisis management.

·         Media training.

·         Media engagement: setting up meetings with top tier media and various internal spokespeople to continuously expand and build a presence with property and vertical media network.

·         Consistently delivering service excellence, meeting with business heads of a regular basis and trying to influence the research as much as possible to ensure our content has a strong enough news hook.

·         Key campaigns that I work on include MIPIM; MAPIC; REVO; Midsummer Retail Report; IHIF; Cities of Influence in addition to a host of all alternative property sector research reports.

View expert