A Business Rate Update: TESCO – in line for £105m business rate cut

In the UK all commercial properties are subject to a tax known as Business Rates. Business Rates are payable based on the Rateable Value of a property, which has historically been reviewed every 5 years however due to the recent period of economic recession, the 2015 revaluation was delayed until now.

The new Rateable Values are effective as of 1^st April 2017. There has been a massive outpouring of commentary on the new Rateable Values and their inequality, creating hardship and putting business’s literally out of business. This view we believe is very ‘South-centric’ as overall research is now suggesting that 77% of retail centres will see a decrease in Rateable Values, only 18% will see an increase and 5% no change.

Many of our Clients, who operate nationwide will benefit from the revaluation. Generally, where rents have risen greatly such as in London, you will see a large uplift in your business rates but if you are a rates payer for a property outside the London conurbation, you are more likely see a large drop in your business rates.  It is also noted that there is new and improved small business rates relief for small businesses. For instance, if a Property has a rateable value less than £12,000 you NOW won’t pay any business rates –  previously this would have been £6,000pa.

Like all tax changes, there are winners and losers and TESCO seems to be one of the former,  but research suggests that there will be more winners than losers and that the extra burden will fall on London much to the relief of the rest of the country.