IN BUSI­NESS Im­pend­ing rates re­view to cause ‘sig­nif­i­cant’ cost rise

Runcorn & Widnes Weekly News - - In Business -

AC­COUN­TANCY firm Mitchell Charlesworth is urg­ing Halton firms to avoid sleep­walk­ing into the largest change to busi­ness rates in a gen­er­a­tion.

The Gov­ern­ment is pre­par­ing its first rates re­view in seven years which will see a new rat­ing list for Eng­land and Wales tak­ing ef­fect from April 2017. It comes af­ter a reval­u­a­tion of 1.96mil­lion non-do­mes­tic prop­er­ties in Eng­land and Wales.

Mitchell Charlesworth cor­po­rate re­cov­ery and in­sol­vency part­ner Jeremy Od­die said the rates will re­flect the rental val­ues of prop­er­ties, with prime city cen­tre sites ex­pected to be worst hit by the reval­u­a­tions.

Across Eng­land, rate­able val­ues are set to rise by 9.1%, rang­ing from a 22.8% in­crease in Lon­don to a 1.1% fall in the North East. Fig­ures for Wales show a 2.9% cut in rate­able val­ues, with shops fall­ing by 8.8% and of­fices by 7%.

Mr Od­die is now urg­ing com­pa­nies to re­view their draft rate­able value to es­ti­mate if they are likely to see a rise or cut in their rates bill.

Mitchell Charlesworth has of­fices in Widnes, Manch­ester, Liver­pool, Ch­ester and War­ring­tons.

“This move rep­re­sents the largest change to busi­ness rates in a gen­er­a­tion,” said Mr Od­die. “There will be win­ners and losers. How­ever, from our per­spec­tive we are not see­ing enough ev­i­dence of busi­nesses seek­ing clar­ity on their new po­si­tion post April 2017.

“Our fear is that many firms are un­aware of how badly they could be hit by the new mea­sures and risk sleep­walk­ing into the re­forms. Due to the fact the re­vised rate­able value will be pegged to prop­er­ties rental value we ex­pect to see a sig­nif­i­cant rate in­crease for sec­tors in­clud­ing prime of­fices, data cen­tres and trade counter re­tail.

“It is re­ally a dou­ble neg­a­tive for the re­tail sec­tor which is still reel­ing from com­pe­ti­tion of non-rate pay­ing in­ter­net com­peti­tors, brought about by the pro­lif­er­a­tion of on­line shop­ping. This will also come as par­tic­u­larly bad news for land­lords who lose ten­ants and will no longer ben­e­fit from empty rate re­lief for an ex­tended pe­riod, which was the case in years gone by.”

Mr Od­die said the re­view is sig­nif­i­cant be­cause by 2020 coun­cils will be able to keep 100% of all lo­cal­lyraised taxes to help fund lo­cal ser­vices.

He said: “For busi­nesses who face an in­crease in rates, this rise will be capped at 5% in the first year for small prop­er­ties.

“There is also tran­si­tional re­lief worth £3.4bn to help busi­ness own­ers ad­just to the new bills.

“How­ever, many busi­nesses which have been ex­pect­ing an im­me­di­ate ben­e­fit are likely to be dis­ap­pointed. Some north­ern re­tail­ers have pro­jected a 60% fall in busi­ness rates but could see as lit­tle as 2% in the first year.

“The ‘tran­si­tional’ re­lief will also pro­ceed at too slow a pace for many re­tail­ers. This comes on top of a two year de­lay in the rates re­view which has left strug­gling firms hav­ing to cope with higher than ex­pected bills.

“We urge firms un­sure of their po­si­tion to seek pro­fes­sional sup­port im­me­di­ately so they have a strong foot­ing when the new rates come to pass.” ●

Jeremy Od­die of Mitchell Charler­sworth has warned com­pa­nies that they face the largest change to busi­ness rates in a gen­er­a­tion, and busi­nesses could face ma­jor cost in­creases

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