Northern businesses will suffer if ministers back down over business rates revaluation

Stuart Hicks, Manchester Office, Director - Dunlop HeywoodDunlop Heywood Director Stuart Hicks is warning of a severe knock-on effect for thousands of Northern businesses if Ministers back down over planned business rates rises this April.

Whilst business leaders and retailers in London and the South East have been protesting over business rate rises due to start on April 1 following the implementation of the 2017 Rating List, little has been said in defence of other regions where business rates are set to fall.

“What people have not been talking about is the fact that, by law, any new Rating List has to be fiscally neutral, said Hicks, Director of Dunlop Heywood and one of the UK’s leading authorities on business rates. “That means any concessions the Government give before April 1 in terms of limiting or phasing in the rises will have a knock-on effect elsewhere in the country.

“Northern businesses – particularly the North West, Yorkshire and the North East – have been paying inflated business rates for two years and, even when the Revaluation was confirmed for 2017, they were told that those decreases were to be phased in.”

“And just when they think there is light at the end of this particular tunnel, there is now the threat that ministers will cave in to London-centric pressure to help businesses that have already enjoyed two years of “subsidised” business rates.”

Communities secretary Sajid Javid and Chancellor Philip Hammond have borne the brunt of the recent business rates’ backlash and it has been reported the Chancellor may now use March’s budget to lengthen the period of the transitional rates relief scheme for companies hardest hit by proposed increases.

Hicks added: “The spotlight over the last few weeks has been very much focused on the effect on London, its retailers and small businesses there, but we didn’t see this media furore in 2015 when the northern regions desperately needed help. We are seeing a classic north/south divide once again when it comes to voices been heard at national level.”  

The widening gulf between business rate winners and losers was sown in 2015 when the then Government postponed the five-yearly revaluation which allowed for business rates to be “re-set” to reflect any fluctuations in commercial property rental values.

The postponement meant that businesses, which were hoping for a decrease due to rental levels crashing after 2008, were left paying bills set at the 2010 Revaluation which used 2008 rental levels as its bench mark. In stark contrast, London rental values continued to soar but business rate rises didn’t increase accordingly.