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November 16, 2012 8:31 pm
Ministers are under pressure not to delay a review of business rates, following claims that retailers on northern high streets are being locked into higher rates bills at a time when high street rents are plunging.
Rents are used to calculate the level of rates that businesses must pay, and are revalued on a five-yearly cycle. However, Eric Pickles, communities secretary, has delayed the move by two years to 2017 on the basis that it would help small businesses and prevent unexpected rate increases.
Figures from the government’s Valuation Office Agency suggest that 800,000 businesses would have faced increased bills in a revaluation with only 300,000 facing decreases.
But the industry has argued that the move is unfair because it will leave tenants paying a levy based on “top-of-the-market 2008 rents” for longer. Colliers International, the property agency – which has described the decision as a “scandal” – has launched an e-petition on the Downing Street website calling for the 2015 revaluation to go ahead as planned.
The firm’s own research suggests that rents have fallen steeply in many parts of the country since the last valuation in 2008, meaning that tenants are locked into overly high rates. The falls include 26 per cent in the Northeast, 20 per cent in the East Midlands, 21 per cent in Merseyside and 23 per cent in Yorkshire.
By contrast rents in London’s West End have risen 26 per cent in the same period, meaning that shops in the most expensive part of the country will benefit from the delay in the revaluation.
“Struggling businesses have been eagerly awaiting the 2015 revaluation as a relief from high rates bills,” said John Webber, Colliers’ national head of rating. “At a time when businesses need all the support they can get from government, this is just another slap in the face.”
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