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The new ratings taking place next year mean that business rates across the UK are set to increase. Historically, business rates are re-evaluated every five years, however there was a government decision to postpone the re-ratings in 2015, which means that it’s actually been seven years since they were last updated. Thus, current rates are based on the rental values set at the bottom of the 2008 market, so companies should prepare themselves for a sizeable increase next year when the new ratings take effect.
Large businesses could be the worst affected when the new ratings come through, with some potentially seeing their rates rise by 45% under new government transitional relief proposals. Smaller properties with rateable values of £28,000 in greater London will be capped at 5%, but the larger properties with rateable values of £100,000 plus will be stung with 33% or 45% increases in the first year.
Eugene O’Sullivan, Director at tenant acquisition specialist Morgan Pryce says: “The new government shake up must be addressed; the business rates reform is unreasonable for all types of companies and property owners. Firms are potentially looking at year-on- year rises of up to 45% with 6 months notice – the chances of them being able to budget this within the time frames given are slim-to-none. Selected companies are also due a relief on their rates, with some properties’ value falling. In light of the government’s choice to set a high limit on the increase businesses can face, it is interesting to see that there is a small cap on how much companies can reduce their business rates bill.”
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants