In just over a week, retailers will be facing the largest annual increase in the Uniform Business Rate (UBR) since 1991. The UBR for 2009/10 will increase in line with the September 2008 RPI figure of 5.0%. The UBR is set to increase from 46.2p in the £ (of ratable value) to 48.5p.
Despite the February 2009 Retail Prices Index (RPI) figure being zero (see earlier story) UBR increases are traditionally based on the September figure.
And from April next year a brand new ratable value list will be published which will be based on the rental value of a property on the 1st April 2008 or actually what the Inland Revenue Valuation Office assess that the rent for a property should be on that date regardless of the actual rent being paid.
Both the April 2009 increase and the likely 2010 increases will be a bitter blow to retailers who will either be mired in recession (2009) or only just recovering from it (2010). It will also make the work of local authorities battling to support small businesses even harder. Although local authorities are tasked to collect UBR they do not keep it. It is passed to central government which determines how, and where, it is spent.
Most commercial property will have seen a significant increase in rental values between April 2003 (the last date the RV list was based on) and April 2008. And to make matters worse the transitional relief, which phased large increases will be scrapped next month.
Many tenants will be looking at UBR payment increases of between 50% and 100%. Wandsworth Council for instance has highlighted the plight of one local newsagent currently facing an increase from £260 to £1,006 per month.
Meanwhile research by the CBI has shown that 63% of retailers suffered a fall in sales in the first half of March.
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