Business rate advisors at Colliers International have backed calls to freeze rates before it’s too late.
Chancellor George Osborne is facing mounting pressure to help ease the burden on rate payers, not least struggling retailers across the West and South Wales.
Retail commentators claim business rates are fast overtaking rents in many parts of the West and South Wales as their biggest cost after labour.
Rating expert Ben Batchelor-Wylam from Colliers International’s Bristol office said the Chancellor could deliver some much needed festive cheer by freezing business rates as part of his forthcoming Autumn Statement.
He said: “Business rates are a ‘make or break’ issue. They are the main reason why potential occupiers don’t take new space. Worse still, the incremental creeping cost of rates is pushing many businesses over the edge. Enough is enough.”
Business rates are based on a property’s rateable value, the cost of which is due to increase 3.2 per cent next April, a leap of almost 23 per cent in five years.
“This astonishing reality comes in the midst of the worst recession since the last war.”
Ben continues: “The retail sector is certainly not out of the woods and recovery remains very patchy across the region let alone the UK.
“Freezing rates will give many shops the breathing space they need to see out the recession. Realistically, fundamental changes won’t happen overnight but change is needed.
“Whilst calls for a change that maintains the integrity and fairness achieved by having regular revaluations and accurate Rateable Values haven’t gone away a freeze in rates is one step in the right direction.
“Current regulations don’t provide enough options or simplicity, the recession has proven the system simply isn’t working for UK business.”
Suggestions include doing away with onerous and arguably irrelevant annual RPI adjustments, addressing competition from online retailers and providing clarity and certainty to avoid risky lending, including high levels of debt.
“Quite simply a revaluation would help re-base rateable values by redistributing the burden of tax from those who can least afford to those who can.”