Business rates in retail property
With new rateable values for the majority of properties just around the corner, we set out what changes will be seen within the retail sector.
The majority of retail properties will see their rateable values reduce as these are based on rents back in April 2021. There has generally been a steady decline in the rental value of retail premises for many years now. In many cases the current rateable values-based on rent in 2015-are lower than they were in 2008. As well as this reduction in rateable value, a large number of retailers will also be eligible for some sort of business rates relief from April 2023. Whether this is small business rates relief for eligible business with properties below £15,000, or retail/hospitality relief, which is being increased from 50% to 75% up to a maximum of £110,000 per business.
One exception to this trend is the convenience store. These retail premises are set to increase in rateable value on the whole, some by over 10%. Convenient stores differ from other retailers in many ways; they are open for longer, often larger and wider than other shops and were also not subject to forced closure doing the COVID-19 lockdowns. As the Valuation Office Agency (VOA) value properties using rents in April 2021, it is therefore understandable why convenience stores would be seen as a higher performer than shops used for other areas of retail.
Vickery Holman have secured a number of business rates reductions within the retail sector and expect enquiries on this type of property to remain high. There can be many inaccuracies in a business rates valuation, whether it be floor area errors, discrepancies in the zoning approach used on many properties or the valuation is not in line with other local properties. Retailers could save money on their business rates through a variety of areas so it is worth their while checking in with a business rates surveyor to ensure no opportunities are missed.
