Radical alternative to our current rate relief system
Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association (NIIRTA) and Colin Neill, chief executive of Hospitality Ulster
Business rate reform is now the top economic issue for the Finance Minister. We need radical reform of business rates — not just small-scale superficial changes.
In the last UK Budget, the then-Chancellor announced many small retailers and hospitality businesses would now be paying no rates at all alongside a big extension in small business rates relief scheme in England.
While the Northern Ireland Executive has in place a small business rates relief scheme, it does not go far enough to help the local businesses that need the most help.
Recently our two organisations launched a radical alternative to the current system of small business rate relief, which would be targeted to the independent retail and hospitality sectors. As both sectors make a huge contribution to our local economy, town centres and tourism we believe it is right for the Executive to make them a priority for rate relief.
Our members consistently tell us that their rates bills are a significant financial burden on their businesses, restricting growth and on occasions forcing them to close. In addition, Northern Ireland has nearly twice the UK’s national average of levels of high street dereliction. We believe our rates plan will address this problem and begin to reverse this decline.
We propose a tiered system of relief ranging from:
- 100% for those with a net annual value (NAV) under £10,000;
- 50% for those with a NAV of between £10,000 and under £15,000 and;
- 25% for those with a NAV of between £15,000 and under £25,000.”
The total cost of this relief would be £36m, which would mean that an additional £18m is needed above the £18m that it currently costs to provide small business rate relief. In order to fund this additional £18m we recommend that the vacant property relief after three months should be reduced from its current 50% to 15%.
Our scheme is fully costed and involves no new expenditure to the NI Executive budget. It is value for the taxpayer, ensuring that the businesses that need help with their rates bills the most, receive it. Directly assisting our independent retail and hospitality sectors is in line with existing rate relief for manufacturing, agriculture and charity shops.
Not only will our rates relief scheme be beneficial for many existing independent retail and hospitality businesses, but potentially assist new start businesses in our sectors with a substantial rates reduction helping reduce their start-up costs.
We also want to see the extension of the empty premises rate relief scheme, which gives a 50% discount to the first year of a new business to include a 25% reduction in their second year.
Reform of the rates hardship fund is also needed to ensure it is easier for our members to claim in the event of flooding or serious disruption to trade as a result of major roadworks or public realm changes.
There is no reason why this new Retail and Hospitality Rate Relief Scheme could not be in place by April 2017.