Retailers in 11 out of 14 cities around the UK should expect to see their average rateable values decrease in the 2017 business rates review, according to a leading real estate firm.
Analysis from CBRE has indicated Aberdeen, Leeds, Cardiff and Bristol will all see their average values decrease by over 30 per cent.
While this may be welcome news, as well as an incentive to buy in these cities with reduced occupancy costs, the rateable value decrease won‘t be felt across the board, as some retailers are still likely to have an increase from April 1 next year.
In Central London, rateable values could increase by a whopping 170 per cent.
CBRE‘s analysis comes shortly after the government established a consultation for the regulations that will underpin the business rates appeals process.
The regulations state that the Valuation Tribunal will only order an alteration to the rateable value of a business if it considers it to be “outside the bounds of reasonable professional judgement”.
Retailers will also have to pay to pursue an appeal for each individual site, increasing the potential overall costs involved.
“With the cumulative rateable value set to fall across the UK, the government will be seeking to maintain the level of tax generated by the business rates system,” CBRE rating senior director Tim Attridge said.
“Therefore the multiplier will be higher than we‘ve ever seen immediately after a revaluation. Retailers should be aware of what the potential changes might be, and the impact on their business.
“Yes, there is the option to appeal, but this will be a very protracted process and the definition of ‘reasonable judgement‘, is far from clear.
“If the margin of error is as much as 10 per cent or 20 per cent, for example, retailers will pay considerably more than they might reasonably expect over the five years of the new rating list.
“With this lack of clarity, the key is for retailers to budget accordingly now, review their strategy and ensure they have sufficient funds in place to either challenge, or adapt to a new system in order to survive.”