Commercial surveying news from the Beattie Partnership

Will Business Rates Bring On the Brexit Blues?

Britain’s economic future feels uncertain following the Brexit vote, and whether you voted leave or remain, this uncertainty will have knock-on effects in the short-term at least.

Commercial landlord Great Portland Estates has reported a slow down in the commercial property market as investors become more cautious, perhaps waiting things out until the UK Government’s EU exit negotiations begin in earnest.

Consumer confidence has also hit a notable low, according to market researchers GfK. The group has seen the biggest slide in consumer confidence for 21 years. This is likely to have a knock-on effect for retailers and other commercial businesses.

What about Business Rates?

As things stand, business rates are set to increase for many next year following the 2017 rating revaluation. This has been long overdue, but its timing is now likely to increase the rates burden for many businesses. This is because it will be based on April 2015 values, at a time when the economy was in recovery, and way before any Brexit shockwaves were going to be felt.

Are there solutions? Certainly key representatives of retail businesses think there should be. Representing over 100,000 shops and other businesses, they have combined forces and written to the Chancellor, asking that business rates reform be prioritised as a more effective measure for boosting competitiveness compared to his proposed corporation tax cut.

They have seen some successes with a switch from the retail price index to the consumer price index as a benchmark for business rates and a doubling of the Small Business Rates Relief threshold to £12,000, with phasing up to £15,000.

Transitional rate relief is also available for qualifying businesses for phasing of changes in rates liability and there could be scope to make this more palatable for those facing increases, although this might come at the expense of those expecting reductions.

There are also a plethora of reliefs that are currently constrained by the EU State Aid de minimis limits. One consequence of Brexit could be to free up rate relief, alongside the extension of enterprise zones.  Councils also have increasing powers to incentivise areas requiring regeneration.

As the post-Brexit period of uncertainty continues, the economy is going to feel the impact. Anything that can help lessen this impact will be helpful, which is why looking at business rates is important.

In the meantime, ratepayers should learn about the impact of the forthcoming revaluation and identify any changes to your property and circumstances, to ensure you are not paying over the odds in hardening times.