March 13, 2014
The decision by the government to put off a revaluation of business rates until 2017 will cost 40% of UK retail businesses dear, according to new research by Jones Lang LaSalle (JLL) Retail.
JLL has studied the impact that a 2015 Rating Revaluation would have had on the top 1,000 retail destinations in the UK. Originally scheduled for 1 April 2015, the deferral of the next revaluation to 2017 has created winners and losers it says.
JLL has found that 32% of retail locations are unaffected by the deferral, while 28% are short-term winners. However, 40% of retailers will lose out as a result of the postponement, it says.
Tim Vallance, head of UK retail and leisure at JLL, said: "Further damage to the UK high street is inevitable if revaluations are deferred. We need to bring forward valuations and to ensure future valuations are undertaken on a more frequent basis."
The government conducts property valuations every five years to ensure business rates are accurate. Last year, it announced that it would defer the 2015 revaluation until 2017 on the basis that this would help businesses. However, retail bodies say that property values in many parts of the country have fallen since then.
According to Retail Week, high street minister Brandon Lewis said: "Our decision was based on research by the independent Valuation Office Agency's using professional judgements and rental market evidence. They estimate that over 800,000 premises would have lost out."
He added: "People should take this so-called research from surveyors with a pinch of salt. They should declare their financial interest, as it is only surveyors who are losing out from a later revaluation, as it means less work for them from charging for business rate appeals."
British Council of Shopping Centres director of policy Edward Cooke told Retail Week: "Delaying the business rates revaluation was madness and based on spurious data. Although a U-turn is clearly not on the government's priority list, it must use the time until 2017 to reform the system."
A recent investigation into business rates by the Department for Business, Innovation & Skills declared the system was "unfit for purpose".