REVEALED: Estimated business rates for 2017
Estimated business rates for 2017 are now available online but the long-awaited revaluation isn’t all good news for businesses. Some are facing significant hikes and those who are set to see a reduction will not see immediate relief.
Businesses in England and Wales can now go online to get an estimate of what their business rates will be from April 2017.
The Valuation Office Agency has released an online calculation tool that allows businesses to check their new draft rateable value and work out their business rates for next year.
The long-awaited revaluation has been dubbed “the largest change in a generation” – but unfortunately it’s not all good news for businesses.
What has changed?
Business rates are a property tax, based on rental values, and are a significant cost for many small businesses.
Rateable values are reassessed every five years but the property values used for business rates are always from two years previously.
Business rates were last set in 2010 based on property values in 2008.
The new rates are based on rentable values on 1 April 2015 and will come into effect on 1 April 2017.
This is two years later than expected. The change was postponed because the government wanted to avoid “sharp changes” to business rates bills.
However, a lot has changed in seven years and with significant shifts in property values since 2008, there will be even more dramatic alterations when the new rates come into effect.
The hardest hit
Due to rising property values, businesses in London and the South East are facing a significant hike in their rates.
Small retailers and restaurants in central London are expected to be the hardest hit. It has been predicted that some could be facing increases of over 20%, while across the capital as a whole businesses could be facing up to a 14% jump on average.
Big businesses can also expect to see significant increases.
According to the BBC, Telecoms giant BT has condemned the new business rates, saying it could push up the cost of broadband services and have a negative impact on future investment in the network.
The BBC suggests that the new annual valuation will see BT’s charges skyrocket from £165m to £743m.
BT said: “We are extremely disappointed by the new rateable values, which are clearly excessive.
“It is highly likely that an increase of this size would lead to higher prices for consumers and businesses.”
Who will benefit?
In contrast, many small businesses, particularly those in the north, will see a significant drop in their charges.
This will be welcome news to those who have been paying artificially high bills for many years.
However, businesses will not feel the immediate value of the reduction, with the new rates to be introduced in stages to help companies adapt.
The transitional period is designed to ease the changes, offering a financial cushion to those that will see their bills go up.
But even businesses that are set to benefit from lower property valuations will see the changes introduced in stages.
Many business leaders have argued that this is not good enough.
Paul Turner-Mitchell, a business rates campaigner based in Rochdale, said: “Across the board in the north-east businesses have been paying artificially high bills for two years. So this is a kick in the teeth for them.
“There’s going to be some really struggling areas where there’ll be a huge reduction in rateable values, and they need the immediate value of that – not a phasing in.”
What do you think? Will the business rates review help or hinder your business in 2017? Please share your comments below.