When Chancellor Philip Hammond presented his budget earlier today, he announced significant financial assistance to help small and medium-sized high street retailers in England, lobbing 1/3 of business rates bills for properties with an NAV lower than £51,000. It is still unknown whether similar savings will be extended to the struggling retailers of Northern Ireland.
Technically the revised Barnet Formula will allow for such savings to be included in future Northern Ireland Budgets, however due to the current Stormont impasse, the absence of a Government and the historic strong resistance in supporting the private sector, it is doubtful whether these savings will be ever be passed onto the Northern Ireland retail sector.
The difference between the business rates payable by Northern Ireland retailers and their English counterparts can only now be described as “obscene” and this is without taking into account that Land and Property Services in Northern Ireland have assessed the NAV’s of many properties far higher than the rents actually paid by retailers.
In Newry for example there can be a 100% variance on the NAV and added to this the Northern Ireland councils now set their rates poundage which is the multiplier applied to NAV’S (ranging from £0.51 to £0.63 at far higher levels than in England which is set £0.48) This further increases the difference in rates payable and is yet another smash and grab on the vulnerable rate payers of Northern Ireland. The actions of LPS and our councils have now resulted in the preposterous position where many retailers now pay more in business rates than they do in rent. In England rates are typically less than half the rents payable.
As you can see from the table below the difference in rates payable across various rateable bands are highlighted. The differences are most pronounced in the £14,000 rateable band, which is one of the most common bands for a High Street Shop in Northern Ireland, a retailer now will have to pay between 100% to 130% more than a comparable English retailer.
Considering that Northern Ireland is one of the most impoverished parts of the UK and has the highest level of retail shop vacancies and proliferation of charity shops, the position is not only unacceptable but unsustainable.
We need to ensure that the message is understood by our Politician’s, Civil Servants and Councils that such a divergence is now unacceptable and Northern Ireland retailers demand parity with comparable English retailers and a rates system which is not only fair but affordable.
Land and Property Services need to also start treating the ratepayer with a respect that has been lacking in recent years.
As Arlene Foster herself said she is not willing to accept divergence with the rest of the UK, well neither will ratepayers accept such divergence either!
Change is now long overdue.
Patrick Murdock is a dual qualified Chartered Surveyor and qualified Tax Advisor original from and currently in based Newry. An independent free thinking liberal at heart, prior to establishing his own specialist consultancy, Patrick has built a twenty year career working for a number of global advisory firms and continues to work across markets in the construction, property and final services industries and has considerable experience and practical knowledge of working day today in the UK, Northern Ireland and ROI markets.
He is also Cofounder and operator – The Hub, Newry.