The long-awaited high level statistics give a broad overview of the draft percentage changes in the rateable value (RV) of business properties across England and Wales from 2010 to 2017.
Most experts expected to see an overall reduction in England of around -3% instead it is a 9.1% increase.
Unsurprisingly, London and the south east were the hardest hit of any region, adding further impetus to the recent pledge made by the Prime Minister to rebalance the economy across the country as a whole. With Yorkshire and Humber offices also seeing the biggest fall of any sector in any region, the case for the Northern Powerhouse as a viable alternative for businesses seeking to relocate away from the capital, has received a substantial boost.
In terms of specific sectors, England’s retail market takes a hammering, with an overall increase of 4.7%, compared with a reduction of 8.8% in Wales. London, as predicted, sees the biggest increases. The sector is already navigating the significant changes in consumer shopping habits over the last ten years. Today’s figures may lead to further debate about the need for retailers to invest in a robust online strategy.
Infrastructure and utility occupiers will have a shocking 41.9% increase in England and 29.1% in Wales. Not good news for consumers.
Another surprise is the provisional multiplier. This was guesstimated to be around 0.53p in the pound. The government has indicated this will be 0.467p for small business and 0.480p for standard.
In the final announcement of the day, the DCLG issued its consultation on transitional phasing. Its preferred option will see large ratepayers (over RV 100,000) subsidise decreases to middle band ratepayers of between RV 20,000 to RV 99,999.
Paul Easton, National Head of Business Rates at LSH, commented: "While today’s announcement does give a useful, broad indication to the changes, the devil will really be found in the detail. A second, more comprehensive version of today’s announcement will be published on 6 October 2016, following the issue of the full draft list on 30 September. Today’s figures clearly mask wide variations. We need to thrash out the full implications for ratepayers so they can take informed decisions on how they will react to these figures.
"With this provisional data already throwing up a number of surprises, today’s release simply goes to show that the old adage that ‘nothing in life is certain other than death and taxes’ simply doesn’t wash."