We will get to see the detailed provisions for the business rates soon but suggestions are the one third reduction for properties with a RV up to £51,000 will apply for two years (April 2019-21). A one third reduction would be a significant sum, for example one of my clients’ property investments in Wellingborough town centre will see the retailer’s annual rates costs reduce by approx £7,000.
A typical property set to save one third from the business rates relief. This is one of my client’s investments in Wellingborough.
Pending site of the detailed provisions I’m thinking if Mr Hammond had rung me for advice leading up to his budget I would have advised he used the money to help rate payers in a different way. Remove the downward transitional phasing rules. The principle of business rates does work in the sense that those properties in locations with rising values will pay more than those in falling locations, provided regular re-valuations occur. However transitional phasing means a reduced RV following a re-valuation won’t provide the same percentage reduction in annual rates payable. I have written about this unfortunate outcome earlier (Businesses Not Getting Their Fair Share, November 2017). It is incredibly frustrating, impeding the full reduction a business in a struggling area is entitled but unfortunately not one many are familiar with; clearly too much detail for the daily papers to get into!
Mr Hammond’s other hand out, the fighting fund sounds appealing. I can imagine a Council with a well thought thorough plan for its town centre will know immediately how to effectively utilise any available money. Those without such a practical plan will struggle and no doubt will lose out during a competitive bidding process. This will encourage public and private sector collaboration which I’m keen to support.