On the first of April, revalued business rates were put in place for the first time in seven years. These are based on the rental value of a business’ premises. Given that rental values have increased since the last valuation (2008) some small businesses were at risk of paying higher business rates, though the government insisted the process would be revenue neutral.
But the impact does not seem to have been as harsh for Northamptonshire as it was reported to be elsewhere. Like the rest of the country, since the 1st of April 2017 every non-domestic property in Oundle has received a new rateable value on which Business Rates will be predicated for the next five years.
The Chronicle found that some local businesses saw their rateable value remain the same or even fall slightly following the 1st of April.
Out of 49 business addresses in the Market Place, West Street and New Street, 33 properties saw their rateable values increase from the previous valuation, while 5 properties saw their valuations decrease, and 11 did not change.
However, 35 properties are now below the threshold at which business rates are due, despite the increase in rateable values. Last year, prior to the new revaluation, only 22 business were below the threshold.
This change can be attributed to the new raised threshold that the government has put in place to ensure that the revaluation would be a revenue neutral process.
The level at which business rates are due increased nationally after the 1st of April. A property with a rateable value up to £12,000 is now exempt from business rates. This is double the previous value of £6000 in 2016, which is why fewer businesses in Oundle will now be paying business rates than last year.
However, this may result in lower revenues for some councils, as the higher thresholds could mean fewer businesses will be paying business rates. English authorities retain fifty percent of locally-collected business rates.
The other half goes into a central government pool and is redistributed back to the local authorities according to need.
East Northamptonshire will likely see income from rates fall as a result of the changes because the rentable values of its businesses are not as high as other regions.
The government is working towards allowing local authorities to keep one hundred percent of business rates in what former chancellor George Osborne called the ‘biggest transfer of power to our local government in living memory’.
Additionally, certain properties are exempt from business rates. These may include agricultural lands and buildings registered for worship, whilst charities and properties used for charitable purposes (including sports clubs) may get up to an eighty percent relief on business rates.
The nationwide concern therefore, in the midst of Brexit, about rising business rates might not be such a worry for Oundle’s businesses, although the effect the new valuation might have on the local authority’s revenue, might be.