Government’s failure to deliver real change on business rates remains a thorn in the side. Both for businesses burdened by rates bills equating to around 40% of their total rent bills, and developers seeking to bring premises back into productive use.
On the plus side, Government announced another extension to its Small Business Rate Relief. Originally due to end in March, this has been extended to March 2017. It continues the temporary increase in the level of small business rates relief. This will apply for the whole of the 2016-17 billing year.
However, other concessions are set to fall away:
- 31 March 2016 will be the last date on which businesses can move into previously empty retail premises to benefit from the so-called Business Rates Reoccupation Relief. It offered, in principle, a 50% business rates discount for 18 months for businesses moving into previously empty retail premises between 1 April 2014 and 31 March 2016.
- The Empty Property Rate Relief Scheme ends on 30 September. Introduced in 2013, for certain newly built commercial buildings, it allowed an extra 12 or 15 months’ rate relief.
No new concessions have yet been announced.
The exposure of small businesses is exacerbated when one looks at the multipliers proposed for rates bills next year. The small business multiplier goes up from 48.0p to 48.4p. The general multiplier goes up from 49.3p to 49.7p. The differential between small and general remains at 1.3p but as a percentage the small business advantage is being reduced.
It remains to be seen what Government’s structural review of business rates – expected to report by the Spring Budget – will offer.
A report published in December 2015 by representatives of the real estate industry (The British Property Federation, British Council of Shopping Centres and British Council for Offices) is indicative of the intensive lobbying taking place. It called on Government to reduce the burden of business rates and introduce more frequent revaluations.
With the next rates revaluation due in 2017, it is to be hoped that a system which the industry perceives as breaking – or broke – is fixed.