Any implementation of phased downwards transition in the next revaluation will stifle recovery in the high street and hinder the levelling up agenda.
John Webber, Head of Business Rates at Colliers said, “Although this was primarily a “consumer led” Spring statement addressing issues such as costs of living rises and high energy bills, it was disappointing that the “elephant in the room”, business rates, was largely ignored despite the impact that ultra-high rates bills has had on businesses in recent years.
The Chancellor re-iterated the 50% business rates discount for the retail, leisure and hospitality sector as of 1 April but with a cap of £110,000 per company, this will only support the smallest businesses in the sectors and will do little to help the larger companies who account for the majority of jobs. Any support to businesses in other sectors of the economy was also totally lacking.
Longer term, for the retail and hospitality sector, we do have a rating revaluation in 2023 to look forward to - whereby rates bills will based on rental values of 2021- and this should hopefully mean bills will come down for many in these struggling sectors. But this will be meaningless if the government does not allow business rates reductions to be implemented immediately rather than spreading them over the years of the list in a transitional arrangement as it did in the last list of 2017.”
Downwards transition meant many businesses in these sectors paid too high business rates for too long. It was a key factor in the demise of Toys R Us, Laura Ashley and other high street brands and had a major impact on the high streets of many of the UK’s provincial and poorer towns- areas of the country the government claims it now wishes to “Level Up.”
Webber continued, “Retailers and other high street operators will be now considering their business plans now for next year and looking closely at their future business rates liabilities, particularly when the COVID-related reliefs come to an end. It is essential the Chancellor provides reassurance that rates bills next year will immediately reflect the lower rents we are seeing in the market now, providing incentives for businesses to keep or expand space and for property investors to invest in the sector across the UK.
Without this reassurance the government’s "levelling up agenda” will be meaningless. And the high street unlikely to get back on its feet. We are disappointed the Chancellor was not more forthright in his Statement today.”