Business Rating System In Northern Ireland ‘A Drag On Economic Growth’

The present system of business rating in the north “is not fit for purpose” and “acts as a drag on our economic growth”, a retail chief has claimed.

And Aodhán Connolly, director of the Northern Ireland Retail Consortium, has urged the Stormont executive not to stand still and let the high street die.

He was speaking after a radical review of the business rates system in England was launched yesterday, with a timetable for completion by the Budget in 2016.

The root and branch review will pave the way for changes to the current system in England, which has been in place since 1988, according to the Treasury.

It will set out a range of important questions, some of which go to the fundamental nature of the tax including whether it should remain as a property-based tax.

And although the review doesn’t apply in Northern Ireland, Mr Connolly believes it should “concentrate minds” at Stormont.

He said: “The current system of business rates is not fit for purpose and acts as a drag on Northern Ireland economic growth. It acts as a disincentive to invest and unlike any other national tax it fails to flex with economic circumstances. “That is why our organisation has been calling for a comprehensive case for reform of business rates in Northern Ireland.”

He added: “This announcement, while good news for ratepayers in England, does not apply to Northern Ireland but it should concentrate minds in the executive, as it is no longer an option to say that fundamental reform is too difficult or complicated – that particular ship has sailed.

“Northern Ireland can choose to stand still but with the promise of reform elsewhere in the UK, it risks leaving businesses here at a competitive disadvantage.”

The Treasury said its review in England will look at how firms use property, what the UK could learn from other countries, and how the system could be modernised to better reflect changes in property values.

It follows widespread criticism of the present system, where rates are charged to retailers based on the value of their shop or other commercial property.

The arrangement means that companies with similar turnovers can pay dramatically different sums for business rates because their properties have varying ”rateable values’ depending on the size and location of their premises.

John Cridland, director-general of the CBI, said the present system of business rates in England was “outmoded, clunky and regressive” and “holding back the high street”.