Kyle Taylor (cc-by-sa/2.0)
Stores of Oxford Street will only be able to save a fraction on their business rates bills in 2018 when the government modifies its indexation of rate increases.
In the Autumn Budget, Philip Hammond stated that next year, the indexation of business rates would switch to CPI from RPI.
The British Retail Consortium lobbied for the change, stating that it will save retailers £270m in 2018.
However, property experts have said that for some businesses, the saving minimises the overall increase in business rates that are faced by firms in the centre of London.
Daniel Watney, a property consultancy, has discovered that the measures will save Oxford Street firms an average of 1.6 percent on their business rates bill for the period up to the next revaluation.
For example, in 2018, Zara will be able to save only £10,000 on a rates bill amounting to £1.3m for its flagship on Oxford Street.
Selfridges, which has the biggest amount of floor space on Oxford Street, will save around £100,000 on a total bill amounting to £17.1m.
An associate partner in the ratings team at Daniel Watney LLP, Alex Izett, stated that the switch to CPI would give some relief. However, Izett said that it “does not go far enough for many small to medium-sized businesses.”
“Ratepayers have been calling for three yearly valuations for some time now so the chancellor’s announcement is welcome. However this will not be deliverable unless the government provides the Valuation Office Agency with the funding necessary to carry out regular and accurate valuations,” said Izett.
“This is an organisation that has witnessed year on year budget cuts, over 20 percent in this year alone.”