Change in business rates could cost firms millions, research finds
A number of sectors could be hit with hundreds of millions of pounds in extra business rates due to “poorly thought-out legislation”, according to new research.
The analysis, conducted by property consultancy Colliers, highlighted the impact that the new business rates legislation proposed by the Labour government could have on larger retailers and hospitality businesses.
John Webber, head of Business Rates at Colliers, said the legislation was not “properly thought out” and could “potentially add millions of pounds onto the rates bills of UK Plc — doing little to help grow the economy.”
It comes as the Chancellor announced in her Autumn Budget a 40 per cent business rates relief for those in the industry which have property valued below £500,000, which is down from the current 75 per cent rate set to expire on 31 March.
The long-awaited reform of the business rates system is not expected until next year.
Colliers, however, warns the impact of this could see the higher multiplier rise “by up to 10p in the pound on these businesses” that have property value above £500,000.
The office sector, for example, could see an additional bill of £677m, with larger supermarkets risking an additional £228m.
There are also a number of areas overlooked by the legislation, including the NHS which could see an extra £78m and already-struggling local authority schools seeing £40m.
Webber said: “Whilst we don’t dispute that smaller high street shops should see a lower multiplier than they are currently seeing… what we had hoped to see from Labour’s business rates policy was a lower multiplier across the board, rebasing it to something businesses could afford and which would stimulate growth and investment.
This, Webber added, was meant “to simplify an already over complicated system.”
The treasury has been contacted by Morning Wire for comment.