RECENT announcements and changes to the business rates paid by occupiers of local properties have, for the most part, brought little seasonal cheer. However, there are some brighter points.
The September RPI inflation rate of 5.6% will result in most businesses receiving rates bills that are up by at least this amount next April. The new charges will be based on 45.7p in the pound, rather than the current 43.3p.
There was an opportunity for the Chancellor to announce a lower increase in the Autumn Statement, but instead only a business rates deferral scheme is proposed. This will merely allow occupiers to delay payment of 60% of the 2012/13 increase (3.2% of the total rate bill) for two years. This will be of little benefit. The Government’s own figures indicate that they expect take-up to be very low.
It was also announced in the Autumn Statement that businesses with assessments below a rateable value (RV) of £6,000 will see an extension of the current two-year rates holiday for a further six months. The scheme will now continue until April, 2013.
The relief applies on a sliding scale to RV £12,000. In addition, the change will benefit businesses that have any number of small assessments, not just those with one or two properties. One positive point in the Localism Act is that businesses setting up in Enterprise Zones, such as Liverpool Waters and Wirral Waters, will qualify for rates savings of up to £275,000 over a five-year period, from April next year.
From next year, councils will be able to keep any increase in rates revenue from higher total rateable values in their area. Unfortunately, the completion of developments in Liverpool that could increase the city’s rateable values is currently several years away.
Business rates continue to be a major burden on both occupying and holding property. Concerns at the way rates are currently charged on empty properties continue to be well vented and are fully justified. It is clear these charges are inhibiting new development.
The appeal process is currently taking far too long, with a large backlog of appeals at the Valuation Office Agency.
Businesses need help now, rather than proposals that may give results in two or three years. We, therefore, need to lobby for the Budget to include measures that will address these points.
