Abstract
Purpose Many national retailers have complained about increases in business rates tax bills since the 2017 revaluation. What impact has the 2017 business rates revaluation had on independent high street retailers in market towns in the north of England? The paper aims to discuss these issues. Design/methodology/approach The study uses Valuation Office Agency rating list data to determine rateable value and business rates payable for independent high street retailers in eight northern market towns either side of the 2017 rating revaluation. The data were analysed using business rates matrices to reveal the impact of the new rating list on independent retailers in the eight locations. Findings Analysis reveals that the majority of independent retailers in the northern market towns sampled have experienced reductions in both the rateable value of their premises and business rates payable. Increase in the rates relief threshold has extended relief to almost half of the independent retailers in the study, most of whom receive 100 per cent relief. Practical implications Charity shops receive at least 80 per cent rates relief which means they are able to afford to pay higher rents. This “sets the tone” for landlords setting market rents in that location which are then used as comparable evidence by the VOA when determining rateable values at revaluation further polarising the gap between rate payers and those to are exempt. Originality/value Focussing on independent retailers on high streets in markets towns in north of England, this study provides an alternative perspective to the orthodox view of business rates revaluations having a negative impact on retailers.
Highlights
The retail sector is currently in a state of transition
Greenhalgh (2017) opined that, between 2010 and 2017, most occupiers outside of London had been paying business rates that were too high; for these businesses the revaluation could not have come a moment too soon; in London and the wider south east, many large businesses had been paying rates that were too low but that this had gone unreported: Some pay less, but those who pay more, make more noise (Kay, 2018). It is against this backdrop, of declining retail values across most of the country, with the exception of a few hotspots located mainly in Greater London, that the study seeks to investigate the impact of the recent business rates revaluation on independent high street retailers in northern England
Analysis of the data reveals that the 2017 revaluation has not had a profound business rates negative effect on independent high street retailers in market towns in northern revaluation
Summary
The retail sector is currently in a state of transition. Consumers are being lured away from high streets by online shopping (from bricks to clicks) and recent political and economic uncertainty has compounded matters, with consumers wary about spending their income, retailers unsure on the future of importing products and a rise in inflation (British Retail Consortium, 2018a). Greenhalgh (2017) opined that, between 2010 and 2017, most occupiers outside of London had been paying business rates that were too high; for these businesses the revaluation could not have come a moment too soon; in London and the wider south east, many large businesses had been paying rates that were too low but that this had gone unreported: Some pay less, but those who pay more, make more noise (Kay, 2018) It is against this backdrop, of declining retail values across most of the country, with the exception of a few hotspots located mainly in Greater London, that the study seeks to investigate the impact of the recent business rates revaluation on independent high street retailers in northern England. Methodology The study has compiled data from the Government (GOV.UK), Valuation Office Agency (agent mode) and Google (Maps and Streetview), for a sample of high streets in market towns in northern England, to determine the representation of independent retailers in each location, compared to national high street chains, reveal the change in rateable values and calculate business rates payable by independent retailers both before and after the 2017 revaluation. The terminology surrounding the multipliers is misleading as the small business multiplier can be used by any business, even if they are national with multiple properties, as long as the RV is below £51,000 per annum
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