Could Business Rates Be the Answer?

Commenting on today’s announcement by the Welsh Government to launch a £20 million business rate scheme for Welsh Enterprise Zones, Dan Smith, director of M4 Property Consultants has welcomed the news for the Welsh economy as a whole and considers if more can be done.

“Edwina Hart’s announcement is good news for the Welsh economy. It will certainly make the Enterprise Zones more attractive locations for businesses but what about the other areas in Wales? Are there any initiatives in the pipeline for these?”

He said, “At present the main initiative is the Small Business Rate Relief scheme. This has proved popular with our tenants. For some small and start up companies it provided them with the ideal opportunity to move into commercial premises for the first time or into larger ones benefitting from reduced or even no business rates for the duration of the scheme. For some businesses this has made the difference between be able to afford a property or not.”

The £20 million business rate scheme is just one of the initiatives unveiled as part of the Welsh Governments response to the Business Rates Review published in June. The review also recommended the devolution of business rates and the local retention of business rates.

Dan Smith supports this recommendation. He said, “Devolving business rates would be of benefit as would allowing our local authorities to keep the extra business rates revenue generated by business development in their areas. This would be a welcome change to the present arrangements, giving councils a share in economic growth. Currently all business rates revenue from Wales goes to the Assembly to be redistributed to Welsh councils. “

Explaining this, Dan used Newport as an example, he said, “the city council could have the option to discount business rates as part of its long term regeneration plan. We manage retail units in the city centre and from feedback received from potential tenants, discounted business rates could play an integral part in their decision making when choosing to lease a unit. Tenants often comment that whilst landlords are willing to be flexible with rents, business rates are often more costly than the rent itself.”

Concluding Dan Smith said, “The proposed changes to the current business rate policies would just be one factor to assist in the return of a more buoyant economy, but in my opinion it is a welcome step in the right direction.”