Struggling high street retailer BHS was on the cusp of receiving millions of pounds of business rates cuts, which would have resulted in a saving of over £15m if the revaluation went ahead in 2015, according to Colliers International.
Currently, business rates are recalculated every five years, with the last revaluation taking place in 2010. This was completed before the property crash, resulting in rates higher than rents in a bulk of the UK.
All changed in 2013 however, when the Government delayed the 2015 revaluation, which would have seen thousands of retailers across the nation, including 90% of BHS stores, receive a reduction to their business rates bill.
New data analysis published earlier this week by Colliers, showed that BHS could have saved over £15m per year, or £75m for the five-year business rates period. With the current business rates bill at £44m, the firm says it is clear that business rates played a major role in the retailer’s fall.
Head of Rating at Colliers, John Webber, commented: “The Government decision to delay the business rates revaluation in 2015 certainly had an impact on BHS. It’s hard to know whether it was one of the final nails in the coffin, but clearly a £75m saving is a significant amount of money.
“By delaying the revaluation, Middlesbrough has been forced to pay for Mayfair for far too long in terms of business rates.
“Looking forward to the revaluation later this year, even in London – where we predict business rates increases for a lot of town centres – BHS could have saved something like £650,000 in rates.
Given that almost every other retail centre in the UK is predicted to have a drop in business rates, some respite was on the horizon for BHS. The fact remains that the current business rates regime has done nothing to stimulate healthy high streets.”
Colliers are currently campaigning for a business rates reform which includes the need to offer more funding to the VOA.
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