Greater Manchester’s rates revaluation winners revealed
Greater Manchester retailers the big winners: Bolton, Oldham, Stockport see big falls.
But transitional scheme means some stores will NEVER pay correct amount.
“Madness that some retailers will never see the benefit they are due”.
High street retailers in towns such as Bolton, Oldham and Stockport are the big winners from today’s business rates revaluation – facing falls in their bills of 50% and more – according to analysis by business rates specialists Gerald Eve.
The Valuation Office Agency (VOA) has today published new rateable valuations applied to each of the 1.85 million commercial properties in England – revealing the bills for Manchester businesses from April 2017 onwards. Among the notable changes to rates assessments are:
- Reductions of over 50% for retailers in Bolton, Oldham and Stockport
- Significant drops for shops in Rochdale (39%), Bury (37%) and Wigan (35%)
- Manchester total rateable value rises 7% to £910,648,000
- MEN Arena faces 80% surge
- Arndale centre retailers facing rises of up to 70%
- Manchester United’s Old Trafford drops 8%, Manchester City’s Etihad Stadium rises 23%
- Manchester University surges 50%
- Biggest increase: Sandinista Cantina, 2 Old Street – rateable value rising more than tenfold
Julie Chalmers, a business rates expert based at Gerald Eve’s Manchester office, said: “For hard-pressed companies that have been struggling for some years, these reductions will come as blessed relief, but they also illustrate just how out-of-kilter rates bills have been, with the worst-affected firms subsidising their better-off counterparts for some time. They should have benefited from lower bills 18 months ago, but the unfair postponement of the 2015 revaluation stretched their pain out for a further two years, and they have every right to question the suitability of a system that has penalised them in this way.
“While it appears that Greater Manchester has in general escaped the worst of the revaluation – some shops in London are reporting increases of 80% – there will still be firms in the city that need to address significant increases. They have just six months to work out how they will address their higher bills, a pitifully short period of time to get to grips with an increase in costs and another indictment of the current business rates system.”
The impact of the revaluation is magnified by the Government’s controversial transitional relief proposals, under which larger properties whose values have fallen will see bills reduce by just 4.1% in the first year: for example, Superdrug on Deansgate in Bolton should see its liability fall from £141,645 currently to £73,440, but under the transitional arrangements will have to pay £136,919 during 2017/18.
Worse, the structure of the preferred transitional arrangements means that some stores will never see the full benefit of their decreased bills. With reductions phased in on such a shallow trajectory, large stores such as the aforementioned Superdrug will never actually realise the full decrease during the revaluation period.
Julie Chalmers said: “That the most-struggling firms in the hardest-hit locations will never see the full benefit of their reduced liabilities makes a mockery of the Government’s approach to revaluations. What is the point of revaluing properties if businesses are unable to see the upside? It is yet another example of a confused thinking on the part of the Government and indicative of an attitude that asks companies to “pay up and shut up”.
The reason why decreases are phased in is to compensate Government for the protection it grants to those facing increases in bills; under the Government’s preferred arrangements, any rises facing large firms are ‘limited’ to 45% (compared to a maximum of 12.5% under current scheme).
Julie added: “The last revaluation – based on values in April 2008, pre-recession and in a very different economic climate – came into effect in 2010 which, combined with the postponement of the 2015 revaluation, means that the most-struggling firms will have been waiting seven years to see falls in their bills.
“However, the transitional arrangements mean that rather than receiving the reductions straight away, bills will reduce by only 4.1% next year for larger properties and they will have to wait up five years to feel the full benefit, which for many will be far too late. Companies in the hard-pressed industrial heartlands have been crying out for reduced business rates bills for seven years now since the last revaluation, and at the point at which they finally see light at the end of the tunnel, the Government whips the carpet from under their feet.
“Nobody is claiming that phasing in the largest increases to help businesses address sudden increases is a bad idea, but it is madness that this protection is paid for by denying full and immediate reductions to those in greatest need of them. The costs of phased increases should be paid for by Government – not by those in desperate need of reduced bills – or even better, the system should be reformed to reduce the overall burden and make revaluations more frequent so that such volatility is minimised.”