Executive decides on large retail levy and expanded small business rate relief scheme

Finance Minister, Sammy Wilson, today set out the Executive’s final position on the large retail levy, which will fund an expanded small business rate relief scheme.
~ Thursday, 15 December 2011

These measures, along with a number of other rating changes, are intended to rebalance the rating system during the economic downturn, helping to create the right conditions for recovery. The measures include broadly doubling the amount of rate relief provided to small businesses, with funding provided through a large retail levy. The large retail levy is to be moderated from the planned 20% to 15%, with the shortfall paid out of a modest increase in regional rate revenue receipts, compared to what was budgeted.

Minister Wilson said: “The Executive wants to create the right conditions for a sustained economic recovery, providing assistance to those small businesses that need it most. While the downturn has been difficult for a range of sectors this has particularly been the case for small businesses.”

The Minister explained: “During the consultation I was particularly heartened to hear companies expressing the view that they remain committed to the Northern Ireland market. Having listened to issues raised during consultation, and given a modest increase in regional rates revenue since my original budget announcement, the Executive has agreed that the levy should be reduced from 20% to 15% on average. This will represent a saving of around £20,000 per store per year.”

The Minister continued, saying: “The money raised through the levy will be used to provide much needed additional support to small businesses, which continue to struggle during these difficult economic times. 20% relief will be provided to those businesses with a net annual value of £5,001 to £10,000, with around £6 million likely to be awarded in 2012/13.”

The Minister also explained how consultation had helped shape the final policies. He said: “While there was considerable support for an expansion of the small business rate relief scheme I have taken on board concerns about help being provided to businesses that occupy multiple premises. To address this the Executive has agreed that for 2012/13 those occupying more than three business premises, in total, will be excluded from the small business rate relief scheme. Taking account of the views of interested parties I will also consider whether a more sophisticated approach can be adopted for 2013/14 and 2014/15. However, what will be paramount will be retaining an automated system.”

The Minister continued: “Given concerns expressed during consultation let me make it abundantly clear that the levy and expansion of the small business rate relief scheme will be time limited in legislation to three years, that is, until 31 March 2015.”

The Minister went on to explain some of the other changes that are being introduced for the downturn. He said: “The changes I am asking the Assembly to approve will allow the use of non-commercial window displays in empty shops, without incurring a full rates charge. This is something the Belfast Chamber of Trade & Commerce asked me to introduce to help the city centre. Having listened to all the views expressed during this consultation I want to go much further than this to help get long term empty retail premises back in business next year. To encourage this, 50% relief will be provided when long term empty retail premises become occupied. Ratepayers can apply for this generous concession if the shop has been empty for 12 months or more, with relief then awarded for 12 months.”

In addition, changes will also be brought forward to clarify the valuation assumptions used at the next non-domestic revaluation planned for 2015.

In conclusion the Minister stated: “I will shortly be bringing forward legislation to give effect to these changes. I will be asking the Assembly to approve the legislation, and the use of accelerated passage, so that the final measures can be in place in time for next year’s rate bills.”

Notes to editors:

1. The way forward report is available on the Rating Review section of the DFP website.

2. This includes an overview of the key decisions reached in relation to:

• a large retail levy:
• expansion of the small business rate relief scheme;
• not charging occupied rates on non-commercial window displays in empty retail premises; and
• 50% relief for 12 months for the first occupier of long-term empty retail premises (unoccupied for a year or more) in 2012/13.

3. The June consultation paper, consultation responses and November consultation outcomes report can also be found at the rating review website.

4. The levy will affect around 76 properties with an average levy of approximately £66,000 per store in 2012/13. This will raise around £5m in 2012/13. Expansion of the small business rate relief scheme will provide help to around 8,300 small businesses with a net annual value of between £5,001 and £10,000. The average award will be in the region of £740 in 2012/13, with around £6m likely to be awarded.

5. Media enquiries should be addressed to the Department of Finance and Personnel Communications Office on Tel: 028 9016 3388 or 028 9016 3389. Out of Office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.