Aodhan Connolly: Time to rethink outdated retail rates in Northern Ireland
This week the Belfast Telegraph revealed every one of Northern Ireland’s councils was raising its business rates, from the smallest rise in Antrim and Newtownabbey Borough Council, at 0.99%, to the inflation-busting hike of 3.46% from Derry & Strabane District Council.
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But there is more to come as we have not seen the headline tax rate for the Northern Ireland-wide regional rate, which is set by government at Stormont. While firms in other parts of the UK have known their headline poundage rates since before Christmas, businesses here cannot plan and cannot have that certainty.
There is the very real possibility that they will only find out what the regional rate — and their total rates liability — will be the week before those business rates bills hit their doormats. This would rarely be an acceptable practice in business, and it should not be from our public sector either.
That is not to say that we do not have confidence in the Permanent Secretary of the Department of Finance, Sue Gray. We do. In fact, we have been hugely impressed with the enthusiasm and no-nonsense approach she has brought to such an important role. However, her hands are tied by the fact that we have no minister to make decisions and no Assembly to push for change.
That is what we need — change. Retail has the untenable situation that it makes up 12% of the economy but pays almost a quarter of all business rates. The current system does not reflect the huge structural change in the retail industry, which has been led by consumer behaviour and entry into the digital age.
We need a fresh look at how our rates system delivers for business. We need to make sure that every penny in business rates owed is paid. We need to have a full audit of all of the exemptions and reliefs (some of which are a legacy from the 1930s) to see if they are fit for purpose, and we need to widen the tax base to make it fairer for all. There should be no sacred cows when it comes to taxation.
We have already seen the number of stores in Great Britain contract ,and that will start happening here, so retail will no longer be able to hold up this archaic system.
Quite simply, this outdated taxation system is making Northern Ireland a less competitive place to do business. And let’s be clear about this, should it be retail, manufacturing or banking, it is often not where in the UK will businesses invest, but where in the world. We must be competitive on the global stage, and fundamental business rates reform will be one key factor that needs to happen.
Aodhan Connolly is director of the NI Retail Consortium.
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