Colliers: New business rates will provide relief for retailers
April’s new rates bills following the 2023 rating revaluation will provide welcome relief for many larger retailers, and already appear to be encouraging new store openings, says Colliers’ head of business rates John Webber.
Webber highlights the recent news of M&S’s £480m investment across its UK stores and its plans to open five new locations in 2023 as an encouraging sign for retailers.
“There is no doubt a more favourable business rates environment will help such store expansion, particularly as the government listened to the industry and has not brought in a downwards transition scheme, so that retailers will be paying lower rate bills immediately following the start of the new list in April”, Webber said.
The retail sector will see a 10% decrease in rateable value (RV) and rates bills in the next list, however Colliers anticipates that some areas will see reductions of 30 or 40%. Large department stores and hypermarkets were among the biggest winners of the revaluation, with RVs in London’s Oxford Street having fallen by approximately 30%.
2023’s business rates revaluation explained
M&S’s decision to open its new store in the vacant Debenham building in the Bullring has led Colliers to believe that the rates liability of the old store will reduce by around 47% in April’s new list. This would work out at a saving of over half a million pounds in annual payable business rates.
Looking at the entire M&S portfolio, Colliers estimates that the retailer should see around a £70m drop in its annual rates bills in the UK come the revaluation in April, an approximate reduction of about 23% compared to last year.
Webber concludes: “In making the decision not to introduce downwards transition in its latest revaluation, the Government finally got one thing in its business rates policy right. Let’s hope we see other retailers also feel the benefits of business rates reductions and make the same decisions to invest in new store openings and jobs.”