Mon, 07 Nov 2016
COMPANIES across West Berkshire could be among the hardest-hit by changes to business rates that are set to come into effect in April.
Experts predict that rates in the district could rise by a total of £2.1m, leaving many firms paying much more than they do now.
Soaring property prices in London and the South East over the past few years have meant that business rates in West Berkshire will be higher than in other parts of the country. In areas where property prices have fallen, bills will be lower.
Thousands of companies across the country are set to see dramatic changes to the amount they pay in rates after the Government published the new rateable values of their properties.
The chief executive of rates expert CVS, Mark Rigby, said: “There’s no doubt that the new rating list isn’t the best bit of news for businesses in West Berkshire.
“The previous business rates assessments took effect just as the financial crisis turned the property market on its head.
“That meant that over the last seven years businesses in West Berkshire have effectively been paying less than what they perhaps should have.
“However, the Government’s proposals for transitional rates relief mean that those businesses expecting higher bills should be cushioned by the blow.”
Business rates are based on the value of the real estate but also take into account things like the value of machinery and equipment and the sector in which the business is operating.
Every five years, the value of properties is assessed to determine their rateable value, which is then combined with the ‘multiplier’ – a figure set by the Government each year – to determine the final bill.
All UK firms pay a tax on the shops, offices, warehouses and factories that they use.
Businesses with properties that have a rateable value over £12,000 have to pay rates, but companies with property that has a rateable value between £12,000 and £15,000 will get some relief.
Those located in the countryside with a local population of below 3,000 can get between 50 to 100 per cent off rates.
Charities and sports clubs get up to 80 per cent rate relief, while empty, newly-occupied properties, and businesses in enterprise zones can also apply for relief.
Other properties, such as agricultural land or religious buildings are exempt from paying rates.
The director of Newbury-based commercial property specialist Quintons, Shane Prater, said: “Any increase in rates is going to have a negative impact and makes attracting new occupiers difficult.
“There will be some companies whose rates are likely to go down too and, of course, that is of massive benefit to them.”
Newbury MP Richard Benyon said: “In terms of the wider revaluation announced by the Government, there will be as many winners as there are losers.
“There is always a risk that if rates are higher companies might be tempted to move away but I think Newbury has a buoyant and exciting town centre which people are still investing in.”
The Government is working towards allowing local authorities to keep 100 per cent of business rates from 2020, to compensate for the withdrawal of the Revenue Support Grant.
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