The summer budget will unfortunately provide little comfort for leisure operators looking to reduce their business overheads. The main concerns will come from future rental increases, rising Business Rates and the introduction of the "living wage" at a minimum hourly wage rate of £7.20 from April 2016 for employees over 25.
Business Rates barely featured in the budget despite the government's promise to "radically" reform the system.
The government have however published a progress update on actions it is taking to improve the administration of the system which has been compiled from findings taken from both the private and public sector. The findings are helpful in summarising many of the issues facing the system and possible solutions. What we are still missing is a clear understanding of how any of these changes can be realistically implemented without the need for investment and extra staffing resources within the Valuation Office Agency (VOA).
The VOA are currently collecting information to be used for the 2017 revaluation which will be based on rental values as at 1st April 2015. Controversially, this was a postponed revaluation which should have been implemented in 2015 with the Coalition's rationale being to avoid sharp changes in rates bills. There have been mixed views relating to the postponement with leisure operators in some parts of the country eagerly awaiting a revaluation and others parts (particularly London) nervous about the prospect of sharp increases. A likely outcome is a significant redistribution of the business rates burden falling heavily on London and the South East with liabilities being mitigated in the regions.
At this stage, it is too early to predict with clarity how the Business Rates conundrum will unfold.
Our view is that there is unlikely to be any significant changes in the short term and it is inevitable that the Government will be looking to protect the £26bn of tax revenue which is collected from Business Rates annually. What we do know is that the VOA are facing a backlog of 280,000 rating appeals, therefore ratepayers still waiting for potential refunds continue to be hindered by the current system. The current system is here to stay but we would advise ratepayers to be proactive to ensure their liabilities are managed to keep bills to a minimum.
Fleurets can help you save money!
Over the duration of the 2010 Rating List Fleurets have achieved rates savings in excess of £10m and over 500 successful business rates reductions.
For advice on your rating assessment please call Ben Peers on 0207 280 4738 or email firstname.lastname@example.org