Are Business Rates Too High?

Businesses face many challenges as costs rise and customers search for the best product at the best price in a relentless drive to find value. At the same time, government remains focussed on improving the economy and supports business in all sectors and industries. However, one of the biggest issues facing the viability of many businesses remains unaddressed: business rates.

Business rates raise approximately £550 million a year in Northern Ireland and have grown in recent years as a proportion of overall costs.

During the same period other costs have reduced which means rates are now one of the main challenges facing business owners, not least because they represent a significant and disproportion cost.

In an attempt to address the situation government introduced a rates relief scheme to levy larger businesses and provide relief to some smaller businesses, although the overall amount of rates collected remains the same.

The introduction of the rates levy temporarily benefits small businesses while penalising large businesses and appears short sighted, particularly at a time of austerity when we need to encourage business growth.

The levy introduces uncertainty and unfairness to the rating system and creates a less attractive business environment for private investment, job creation and future business planning.

The imposition of the levy seems an arbitrary decision based on the ‘feeling’ that larger retailers can afford to pay more without, it seems, care or consideration of their need to manage costs and remain competitive.

The real issue, however, is not the introduction of the levy but the decision to collect the same overall amount from businesses at a time when rates have become such an onerous burden.

Looking to the future, government’s imposition of a rates levy is not the answer and a more effective solution is needed to reduce the number of business closures.

Luckily, there is a simple solution, as shown by Omagh District Council’s recent historic decision: reduce the total amount of rates sought from the business sector.

Government needs to raise income from business rates to provide essential services and businesses are happy to pay their contribution but the current level is unfair and unsustainable.

SO, in the short-term business rates need to be reduced while in the long-term there is a need for a complete review and reform of the business rates system to ensure it is fit for purpose.

What do you think?

Are business rates too high?

Look forward to hearing your comments.