Rates cut delay will hit UK’s high streets ‘for years’

BRITAIN’S ailing high streets have been ‘stung’ by a botched review of the business rates system, experts have warned.

They said struggling stores in less prosperous parts of the UK face delays in receiving much-needed tax cuts totalling billions of pounds.

Following a long-awaited revaluation, new draft business rate lists were unveiled on Friday. They propose cuts in the local tax rate at more than 300 of 431 retail centres.

But property consultants Colliers International said thousands of firms in the North of England and the Midlands who had been expecting an immediate benefit are likely to be disappointed.

They said that a ‘transitional’ scheme announced last week to gradually phase in the changes over the next five years would proceed at too slow a pace for many retailers.

John Webber, head of ratings at Colliers, said the slow pace of the transition will result in retailers paying around £5billion more than expected over the next five years.

It 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. Many shops have closed as a result.

Webber said: ‘The light at the end of the tunnel, which you thought was the revaluation, isn’t quite the light of the train coming in the other direction. But, quite honestly, it may as well be if you’re a business struggling to make ends meet.’

He said many retailers in Hull were expecting a fall in business rates of up to 60 per cent but it could be as little as 2 per cent in the first year.

‘This will add up to a lot of money for a lot of people over time,’ said Webber. ‘There are a lot of people in the North of England and the Midlands who have been stung and will not be in a great place when they realise this.’

He said the problem for London retailers is a different one: they face huge rate rises due to the surge in property values in the capital in recent years.

Rent and rates specialists CVS said that the largest shops in Stockport in Cheshire, previously paying £500,000 a year, should be paying as little as £240,000.

By contrast, Polo Ralph Lauren in London’s Bond Street faces a business rate rise from £2.2million to £3.9million, an 80 per cent increase, before supplements are applied.

CVS chief executive Mark Rigby said: ‘Smaller, Northern retailer locations and properties have seen significant reductions in rateable value. Were they to receive the full immediate effect of their much lower rateable values, they would be given a fighting chance to help their communities thrive, instead of simply survive.’