01480 213811

DEFERRAL OF BUSINESS RATES REVALUATION SHOCK

Communities and Local Government Secretary Eric Pickles has announced his decision to defer a review of business rates until 2017.

The move has surprised and angered the business and property community who believe it will result in businesses paying higher rates for longer than necessary and cause further harm to companies in recession-hit areas.

A review of Business Rates in England was scheduled for 2015, but has been postponed which has led to an outcry as current business rates are based on property values in 2008 when the market was at its pre-recession peak.

Property consultants, Barford + Co said the postponement has shocked businesses.

Howard Westgate, commenting on behalf of Barford + Co, said businesses strongly disputed Mr Pickles’ claim that the delay would prevent companies from facing unexpected hikes in their business rate bills over the next five years. The current 2010 Rating List was based on rents achieved in April 2008 at the height of the market rather than sharply lower levels in April 2012 on which a new business rate would have been based if the original revaluation had gone ahead.

Mr Westgate continued: “Overall, the revaluation would not have led to a fall in tax revenue because the Government would have altered the rate in the pound to compensate. The result of postponing the revaluation is really to prevent the tax base being reset. This would have allowed areas that have suffered as a result of the recession benefiting and being supported by lower rateable values.

“The other major problem is that 2008 values are artificially high and, if anything, the revaluation should be brought forward to enable the rating valuations to take account of the decline in market rents that the majority of the country has experienced.”

He said: “This delays any hope of rateable values being realigned with lower rents. It is amazing that the Government believe they are supporting businesses by giving them certainty, when in the vast majority of cases they would be paying significantly less in 2015, when the revaluation was due to take place.

“Business rates are the third largest largest outgoing for most businesses after staff and rent costs and this announcement will do nothing to help them, particularly given the tough trading conditions being experienced at present.’’

‘’Businesses who believe their Rateable Values are set too high will now continue at this level for a further two years but we have an experienced team in house at Barford + Co that have a proven track record of successful rating appeals and we would be delighted to speak to any companies with concerns’’

For more information, contact Howard Westgate of Barfords on 01480 213811 or email hwestgate@barfords.co.uk

Click to go to topTOP