Department of Finance chief Sue Gray vows to tackle 'problems' with business rates
Business levy needs reform, says Permanent Secretary
Department of Finance chief Sue Gray has vowed to tackle "unfairness" in the business rates system as she called for responses to a consultation on reform before next Tuesday.
Ms Gray, the department's Permanent Secretary, writes in today's Business Telegraph that she had announced a review of rates because the unfairness of the system had been raised with her "time and time again".
Now the public has until November 11 to respond to the consultation.
High rates have been cited by the retail sector in particular as a factor making their existence even tougher.
Yesterday, retailer Mothercare, which has two stores in Northern Ireland, said it was likely to appoint administrators as high street conditions toughened.
Ms Gray admitted the rates system here had “well documented problems”. “The reality is the multiplier used to calculate our business rates is now higher than anywhere else in the UK,” she said.
But she said rates were also a crucial source of funding for public services and generated over £1.3bn every year to fund vital services like health and infrastructure.
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She added: “I want a rates system which is pro-business. We must enable and encourage businesses to start up, grow and flourish across all sectors.
“This review is about coming up with solutions which will help create a rating system which is fit for purpose.”
She said the system also needed to be nimble and responsive to change, suggesting businesses which qualify for relief at the moment could face change in the future. Around £238m is awarded every year in reliefs and exemptions for bodies from sport clubs to charities and residential homes.
“Nearly £42m is foregone in rates as vacant premises have relief applied at 50% — while other parts of the UK charge full rates. Are all of these of these reliefs still relevant today?” she added.
She said there would also be a consideration of how domestic rates compare to business rates.
Ms Gray said there were 75,000 business ratepayers compared to 800,000 domestic rate payers —but she said that business ratepayers generated nearly half of the overall rate income.
Also in today’s Business Telegraph, Aodhan Connolly, director of the NI Retail Consortium, calls for responses to the consultation.
He said: “The retail sector is 12% of the economy in Northern Ireland but pays a quarter of all business rates. That is both inequitable and unsustainable.
“We have a plethora of exemptions and reliefs here in Northern Ireland, some of which have been in place from the 1930s when our high streets and industries looked very different.
“We have the highest top rate of business rate taxation of anywhere in the UK by over 11p in the pound. We need to level the playing field.”
Last week, two Larne businessmen, Tom McMullan and Paul McMullen, urged the NI Affairs Select Committee to launch an inquiry into business rates.
They called the DoF consultation “grossly inadequate”. They put together a report on the issue which claims rates here are three times higher than London, with 122 traders in Larne paying £785,000 annually.