Retailers in 11 out of 14 UK cities will see their average rateable values decrease in the 2017 business rates review, according to analysis from CBRE.
Aberdeen, Leeds, Cardiff and Bristol will all see their average values decrease by over 30%. CBRE’s analysis shows the percentage rateable value movement from 2010 to 2017, ahead of the next rates revaluation and the publication of the proposed values by the Valuation Office Agency on 30th September.
While positive news as a whole, as well an incentive to buy in these cities with reduced occupancy costs, the decrease will not be felt across the board and some retailers are still likely to see an uplift come 1 April 2017. In Central London, rateable values could rise by as much as 170%. Furthermore, the analysis comes shortly after the government established a consultation for the regulations that will underpin the business rates appeals process.
The regulations state that the Valuation Tribunal will only order an alteration to the rateable value of a business if it considers it to be “outside the bounds of reasonable professional judgement”. Retailers will also have to pay to pursue an appeal for each individual site, increasing the potential overall costs involved.
Tim Attridge, Senior Director, Rating at CBRE, said: “With the cumulative rateable value set to fall across the UK, the government will be seeking to maintain the level of tax generated by the business rates system. Therefore the multiplier will be higher than we’ve ever seen immediately after a revaluation. Retailers should be aware of what the potential changes might be, and the impact on their business.
“Yes, there is the option to appeal, but this will be a very protracted process and the definition of “reasonable judgement”, is far from clear. If the margin of error is as much as 10% or 20%, for example, retailers will pay considerably more than they might reasonably expect over the five years of the new rating list. With this lack of clarity, the key is for retailers to budget accordingly now, review their strategy and ensure they have sufficient funds in place to either challenge, or adapt to a new system in order to survive.”