It is safe to say that our new Finance Minister Conor Murphy has a very big in-tray of policy challenges. Top of that list is fixing business rates and addressing the huge concerns with the 2020 rates revaluation.
We no longer have a rates crisis — it is now an emergency and Conor Murphy must take immediate action to save jobs and businesses.
If ever there was an example of how dysfunctional, antiquated and broken our system of business rates is, then the Revaluation 2020 ticks all the boxes.
Reval 2020 has actively targeted many independent retailers, with increases of between 20%-40% and actually reduced the rates liability of large out of town multinational supermarkets. This simply beggars belief.
Retail NI members are the mainstays of every village, town and city centre.
They actively invest not just their businesses, but in local high streets and the Northern Ireland economy as a whole.
They are already paying the highest business rates in the UK and to receive notification that many of them now face increased rate bills of up to 40% is a total disgrace.
Take for example Tesco Knocknagoney, a huge out-of-town superstore, which already has an unfair competitive advantage with its location over town centre traders, free car parking and a public transport link.
It has a received a reduction of 15% while many local independent family-owned stores received a 40% increase.
You have to wonder on what sort of objective basis such a calculation could have been made. Do Land and Property Services (LPS) actually have any idea of the impact this revaluation will have on independent retailers and the thousands of jobs they support?
Our colleagues in the hospitality sector have also fared very badly in this revaluation. Independent retailers and hospitality businesses deserve better than this.
Government should be doing all they can to assist our entrepreneurs but instead they are hammered at every opportunity.
In England, independent retailers up to an NAV of £51,000 get a 50% discount in their rate bills. Here, we get a measly 20% discount of an NAV of £15,000.
It is a scandal that Northern Ireland has the highest business rates in the UK, which is restricting the growth of our retail, hospitality and SME sectors. This ham-fisted revaluation has made a bad situation even worse.
Northern Ireland also has the highest shop vacancy rate in the UK. We have heard from some of our already struggling members that the revaluation could be the final nail in the coffin for their businesses, which will add to the number of empty premises, which are a blight on our high streets.
Conor Murphy needs to follow through on his ministerial predecessor’s proposals for a targeted approach to small business rate relief, Rethinking Rates, which was put forward in 2017. These proposals gave independent retailers and hospitality businesses a 40% relief in rates and could be implemented quickly and in be place by April if the political will is there.
In addition, we also need to ensure that any new system of business rates includes incentives for business growth.
In the recent Rates Policy Review, Retail NI outlined proposals for a green rate relief scheme to incentivise businesses to invest in green technology, enhancing the current Empty Premises Rate Relief scheme, a capital allowance scheme and making it easier to access the rates hardship scheme.
It is important to point out those businesses unhappy with their revaluation can appeal and we strongly urge them to do so.
Retail NI and property specialists Osborne King will host a seminar on Reval 2020 on January 20 at 4.30pm at Crowne Plaza Hotel