17/03/2016
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Yesterday's budget will bring good news to some, particularly with the announcement that from 1st April 2017, 600,000 small businesses will be lifted out of paying business rates altogether. Specifically, this will apply to businesses with a Rateable Value below £12,000 and there will be further tapered relief for businesses with a Rateable Value between £12,000 and £15,000. A further 250,000 small business will also benefit from the increased threshold for the standard business rates multiplier to a Rateable Value of £51,000 up from the previous £18,000.
On the face of it, this is welcome news, particularly for many leisure operators in the regions still suffering from high Rateable Values which are based on historic rents. In others parts of the country (notably London) operators will be nervous about the prospect of sharp increases. Ironically, George Osborne recently warned of a "cocktail of threats" to the UK Economy, could this be a statement applicable to the prime central London leisure property market?
Fast forward to 1st April 2017, the date of the long awaited business rates revaluation, Rateable Values should mirror open market rental values as at 1st April 2015. Leisure operators in central London already feeling the pressure from sharp rental increases will be faced with potentially significant rises to their Business Rates bills. Out of all the 32 London boroughs, it is not a question of who will be the winners and losers, it will be more a question of where will the business rates increases be the least or most severe?
It is inevitable that there will be a significant redistribution of the business rates burden falling more heavily on London and the South East with liabilities being mitigated in the regions. Just how this will impact on the central London market is yet to be unravelled and will provide little comfort for leisure operators looking to minimise their business overheads.
Be prepared for the 2017 Rates Revaluation!
With our in depth specialist knowledge of the leisure property sector and for advice concerning your rating assessment please contact Ben Peers on 0207 280 4738 or email ben.peers@fleurets.com.