High Street shops ‘face rates shake-up’, says report

Property consultant Colliers International found 76 out of the UK’s main towns and shopping centres will see an increase in their rates bill, reports The BBC.

Some parts of London will see an increase of more than 400 per cent, it says.

The winners, mainly in the Midlands and north of England, will see business rates plummet, it adds.

Newport in south Wales could see bills fall by some 80 per cent, the report found.

“The business rates losers are found only in London and the South East and it could turn highly profitable stores, including independent retailers, into failing businesses,” said John Webber, ratings expert at Colliers International.

Business rates are a tax based on property values. They are usually revalued every five years.

The last revaluation in England and Wales was in 2010 but this year’s revaluation was controversially postponed to 2017.

The Government’s Valuation Office Agency is busy updating its figures but Colliers has done its own research on how the rating revaluation will affect High Street retailers, based on analysis of rental data from 2010 to 2015.

It says it found big variations across the country:

Marlow faces an increase of 58 per cent in rateable value, followed by Guildford at 42 per cent, and Brighton up by 18.5 per cent.

But Rochdale in Greater Manchester, hit hard by the economic downturn, will see a decrease of 30 per cent. Kidderminster in the West Midlands is down by 42 per cent.

And in London, it is Dover Street which is the biggest loser, with an increase of 415 per cent. Brixton faces a potential 128% increase in rateable value, although Ealing will see a decrease of 46 per cent.

Mr Webber believes some retailers are going to be in for a nasty shock when the business rates change in 2018.

“Business rates is a major cost for retailers and it’s really important that they are able to budget for these once-in-a-generation changes,” he adds.

The government has promised a review of the current system and will deliver its findings by next year’s Budget.

Business rates are expected to raise around £28bn for the Treasury’s coffers this year, more than the sum it raises in council tax.

Retailers currently pay a quarter of this bill, more than any other sector, and are demanding wholesale change, saying the current system is unsustainable.

They say it is an arrangement that always produces winners and losers for individual businesses.