Business rates changes deemed ‘unfair’ to ratepayers

In Industry Comment, Industry News On

The latest revaluation of business rates has met with opposition from campaigners.

The government adjusts the value of business rates to reflect changes in the property market, with the most recent revaluation coming into effect in England and Wales on April 1 2010, based on rateable values from April 1 2008.

The next revaluations will be in 2017 in England, Scotland and Wales.

Among the clauses which have caused consternation in the retail world is one which could prevent firms appealing against rate rises, even if firms can prove they are wrong.

The British Retail Consortium (BRC) is among the signatories to a letter submitted to the Joint Committee on Statutory Instruments, challenging the intended new appeals process against business rates.

BRC chief executive Helen Dickinson said: “Given the growing burden of business rates, it is essential that each ratepayer pays its fair share. However, the plans for the new appeals process would mean that a business rates valuation determined to be inaccurate by the independent Valuation Tribunal for England, would only be corrected if it is deemed ‘outside the bounds of reasonable professional judgement’.  This would be unfair to ratepayers and create additional uncertainty for local government. Instead, a collaborative working relationship between the Valuation Office Agency and ratepayers, where information and evidence can be shared and appeals avoided, should be sought.”

With rates of increasing concern for many bricks and mortar retailers, some may be looking at ways to offset the growing burden by expanding their customer base and adapting to customer needs.

Close Brothers Retail Finance managing director Alex Marsh commented: “The retail industry is in a state of flux. High street shops are continually striving to find new ways to drive footfall, adapt to multi-channel offerings and the ever changing consumer demands. Retailers need to innovate and differentiate themselves from their competitors to succeed in today’s tough environment but legislative changes like business rate rises can make this tricky.

“According to our latest research, more than a quarter of all retail SMEs in the UK cite high business rates as a one of their biggest challenges in competing with larger retailers, a figure which jumps to 38% among London-based retail SMEs. If retailers are to compete on an equal footing they need to combat the challenge of business rate rises by using all of the tools at their disposal to understand their customer base and build deep relationships to drive sales. This could mean offering a variety of payment options, including the ability for customers to spread the cost of purchases. Being agile and adapting to challenges will go some way to absorbing the impact of business rate rises and will help specialist retailers to survive and unlock their business potential.”

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