A heated row is set to erupt between the retail industry and the government, as research reveals that business rates will reach half of the value of rental properties by 2017 – the highest on record.
BNP Paribas Real Estate predicts that following the 2017 re-evaluation, the Uniform Business Rate – the multiplier used to calculate rate payers’ bills – will rise to a record 50p in the pound England.
The news follows a government announcement last month that it will conduct an in-depth review into business rates system in the UK, which has been branded “outmoded, clunky and regressive” by the Corporation of British Industry.
Paul Statham, CEO of London-based Condeco Software, a fast-growth market leader in workspace management technology, believes the government must fast-track this promised re-assessment or risk seriously damaging the UK’s economic recovery.
He said: “The UK is already the most expensive office market in the world, and paying out half as much again on business rates is a devastating expense that will seriously impact many companies in the retail sector. Property prices are the result of market forces, but I believe many of our businesses are paying over the odds on business rates. The sheer cost is a huge barrier to growth, especially for those that have no choice but to operate from a central location.
“The UK economy relies on fast-growing small and mid-size businesses to create new jobs and carry our economic recovery, and these are the companies most at risk of having their prospects hamstrung by unfairly high rates. The funds generated by the rates increase will be meaningless if we cripple the backbone of our economy in the process."