Hotels and convenience stores braced for steeper bills after rates revaluation
Hotels in Northern Ireland from the Europa in Belfast to Newry's Canal Court may face rising overheads after their rateable values were revised.
The Department of Finance (DoF) re-examined the rateable values (NAVs) of 74,000 local business premises to reflect changes in property values.
The figures are to be used to calculate rates bills this year, although business owners can appeal the valuation figures.
The Reval 2020 process has uncovered rising values for hotels around Northern Ireland since the last revaluation in 2015.
Industry body Hospitality Ulster urged its members to check the draft values, which have been published on the website of Land & Property Services, the body which oversees rates.
The DoF said that the rising values will not mean that more rates money will be raised. Instead, the process is described as fiscally neutral.
However, the values are just one element of the process which is used to calculate rates. Figures set by district councils and regional government are also used.
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Reval 2020 leaves hotels in Belfast facing a 52% jump in rateable values.
For example, the rateable value of the Europa Hotel has rocketed from £515,000 to £800,000, while the Hilton Hotel's has grown from £425,000 to £455,000.
At Newry's landmark Canal Court Hotel, the rateable value has grown from £380,000 to £445,000.
Hospitality Ulster said the draft values had dealt the industry a body blow.
A spokesman added: "Business rates are crippling the hospitality sector, which is paying some of the highest rates in the UK with little in the way of rates relief schemes experienced by counterparts in Great Britain."
Hospitality Ulster added that the current rating system which is used to calculate the rates for pubs and hotels was "broken" and "not fit for purpose".
However, some retailers, including those in CastleCourt Shopping Centre in Belfast, may see their rates cut as a result of the revaluation.
CastleCourt's rateable value is falling from £1,100 per square metre to £800. In contrast, the rateable value for Victoria Square Shopping Centre is staying at £1,000 per square metre.
However, other types of retail such as convenience stores at filling stations will see an increase in their rateable value to reflect their greater popularity as more people turn to convenience retailers for their groceries.
Retailers such as Lidl, particularly in out of town units, may also see an increase.
In contrast, big units such as Tesco superstores will see a fall in their values, mirroring the decline of the trolley shop.
Across Northern Ireland as a whole, Reval 2020 found a 6.8% increase in rateable values of all business properties.
But some experts branded the revaluation exercise a wasted opportunity.
Patrick Murdock, the head consultant of advisers Capsure Tax and a member of the Royal Institution of Chartered Surveyors, said the process amounted to "a rearrangement of the deckchairs on the Titanic".
"We now have local retailers with NAVs on their properties which are in many cases double the actual rents they are paying to landlords and potentially up to four times the rates being paid by comparable retailers in England following their recent announcement of rates reductions."
He said that a vacant Dunnes Stores in Newry's Hill Street remained at £117,000 even though it was a completely "unlettable" unit. A nearby SuperValu "remains at £138,000 despite the bloodbath in retail", he added.
Roger Pollen from the Federation of Small Businesses said that more regular valuations should become the norm to avoid the shock caused by higher rates bills.
"While we welcome that the department has carried out this work and recognise that this revaluation will be fiscally neutral, that will be no comfort to those businesses who continue to struggle with the burden of rates," he added.
DoF permanent secretary Sue Gray said she recognised that the revaluation was "not the seismic change" that ratepayers had wanted.
The department is carrying out a separate review of business rates.