An investigation of the impact of 2017 business rates revaluation on independent high street retailers in the north of England

Pages241-254
Publication Date10 Apr 2019
DOIhttps://doi.org/10.1108/JPIF-01-2019-0008
AuthorPaul Michael Greenhalgh,Lynn Johnson,Victoria Huntley
SubjectProperty management & built environment,Real estate & property,Property valuation & finance
An investigation of the impact of
2017 business rates revaluation
on independent high street
retailers in the north of England
Paul Michael Greenhalgh, Lynn Johnson and Victoria Huntley
Department of Architecture and Built Environment,
Northumbria University, Newcastle upon Tyne, UK
Abstract
Purpose Many national retaile rs have complained about increases in busines s rates tax bills since the
2017 revaluation. What impact has the 2017 business rates revaluation had on independent high street
retailers in market towns in the north of England? The paper aims to discuss these issues.
Design/methodology/approach The study uses Valuation Office Agency rating list data to determine
rateable value and business rates payable for independent high street retailers in eight northern market
towns either side of the 2017 rating revaluation. The data were analysed using business rates matrices to
reveal the impact of the new rating list on independent retailers in the eight locations.
Findings Analysis reveals that the majority of independent retailers in the northern market towns sampled
have experienced reductions in both the rateable value of their premises and business rates payable. Increase
in the rates relief threshold has extended relief to almost half of the independent retailersin the study, most of
whom receive 100 per cent relief.
Practical implications Charity shops receive at least 80 per cent rate s relief which means they are able
to afford to pay higher rents. This sets the tonefor landlords setting m arket rents in that location which
are then used as comparabl e evidence by the VOA when determini ng rateable values at revaluatio n further
polarising the gap betwe en rate payers and those to are exempt.
Originality/value Focussing on independent retailers on high streets in markets towns in north of England, this
study provides an alternative perspective to the orthodox view of business rates revaluations having a negative
impact on retailers.
Keywords Retailing, Taxation, Business rates
Paper type Research paper
Background
The retail sector is currently in a state of transition. Consumers are being lured away from
high streets by online shopping (from bricks to clicks) and recent political and economic
uncertainty has compounded matters, with consumers wary about spending their income,
retailers unsure on the future of importing products and a rise in inflation (British Retail
Consortium, 2018a). High street retailers in the UK are experiencing challenging trading
conditions in April 2018, shops entered their 60th month of deflation (British Retail
Consortium, 2018b); reduced patronage, competition from e-tailing and e-commerce,
increases in the minimum wage and other overheads. After rent and wages, business rates
tax is usually the third highest expense for retailers. Business rates are increasingly blamed
for the demise of the high street, including shop closures and large brands entering
company voluntary arrangements. Many national retailers have complained of the rise in
their bill since the 2017 revaluation, however, these are primarily based in the south of
Journal of Property Investment &
Finance
Vol. 37 No. 3, 2019
pp. 241-254
Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-01-2019-0008
Received 29 January 2019
Revised 19 February 2019
Accepted 25 February 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1463-578X.htm
© Paul Michael Greenhalgh, Lynn Johnson and Victoria Huntley. Published by Emerald Publishing
Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone
may reproduce, distribute, translate and create derivative works of this article (for both commercial
and non-commercial purposes), subject to full attribution to the original publication and authors. The
full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
241
Impact of 2017
business rates
revaluation

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