Business Rates Map

Understanding regional business rates in the UK: Insights for commercial landlords and tenants.

Understanding how business rates differ across various regions of the UK can empower both commercial landlords and tenants to make informed decisions, optimise costs, and advocate for necessary reforms.

This article examines the current business rate scenarios across each corner of Britain, providing valuable insights for both commercial landlords and tenants.

But before we get started on specific locations, let’s look at the common challenges landlords face across all areas of the UK.

Empty Property

Empty property is one of the greatest hurdles Landlords face when attempting to mitigate their exposure to business rates. With the often inevitable lag between a property becoming vacant, potential repairs/refurbishment, marketing and subsequent re-letting, Landlords can be exposed to significant empty business rates charges, once statutory empty rate relief has expired:

  • England and Wales: Non-industrial premises receive 3 months 100% empty rate relief, with full rates payable thereafter. Industrial premises receive 6 months 100% empty rate relief, with full rates payable thereafter.
  • Scotland: Empty property relief may be claimed, but each local council has different policies on how much relief can be granted and for how long. We advise checking with your local council on their empty relief policies.

Mitigation of those empty business rates can dramatically reduce overheads, particularly if there is likely to be a prolonged vacancy. Where there are grounds to do so, seeking a deletion of the property is the preferred approach to mitigate empty business rates. Where there are insufficient grounds, legal business rates mitigation schemes are available and vary depending upon the specific requirements and character of your premise.

Practical Tips for Navigating Business Rates

  1. Stay Informed: Regularly check for updates on business rate changes and relief schemes in your region. Government websites and local councils are reliable sources – you can also subscribe to our newsletter on LinkedIn.
  2. Leverage Relief Programs: Make the most of available relief programs to reduce your business rates. Small businesses, in particular, should explore options like the Small Business Rate Relief (SBRR).
  3. Consult Experts: Consider consulting with property and tax experts who can provide tailored advice on optimising business rates and navigating complex regulations.
  4. Advocate for Change: Engage with local business associations and advocacy groups to push for business rate reforms that support economic growth and sustainability in your region.
  5. Optimise Property Usage: For landlords, optimising property usage to qualify for certain reliefs and ensuring properties are assessed correctly can lead to significant savings.
  6. Future Planning: Keep an eye on potential future reforms to the business rate system, especially in the post-pandemic landscape. Being proactive can help in adapting to changes and seizing new opportunities.

Business Rates In Different Regions of Britain

Now let’s look in detail at specific areas of the UK, starting with the North. For landlords in North Britain (Scotland & Northern England; Newcastle, Manchester, Leeds, etc.), competitive business rates can attract small businesses and start-ups. Tenants can benefit from schemes like the Small Business Bonus Scheme, which significantly reduces operating costs. The challenge lies in advocating for more infrastructure investment to enhance business prospects.

Business Rate Overview:

  • Scotland: Scotland has implemented a range of relief schemes, notably the Small Business Bonus Scheme, which offers significant reductions for small businesses. Properties with a rateable value (RV) up to £15,000 can receive 100% relief, benefiting many small enterprises.
  • Northern England: Business rates in Northern England are generally lower compared to the South, reflecting lower property values. However, there is an ongoing push for further reductions to stimulate economic growth. For instance, Manchester has an average business rate of £0.512 per pound of RV.

Unique Challenges:

  • Economic Disparity: The North faces economic challenges compared to the South, including lower average incomes and higher unemployment rates.
  • Investment Needs: There is a pressing need for more investment in infrastructure and business development to level the playing field with the South.

If we look to the East (e.g., Norfolk, Suffolk, Cambridgeshire) landlords should capitalise on the region’s competitive rates and enterprise zones to attract tenants. Tenants can leverage these lower rates to expand operations, especially in tech hubs like Cambridge. However, balancing rural and urban needs and pushing for infrastructure improvements are key focus areas.

Business Rate Overview:

  • Competitive Rates: The East of England benefits from some of the lowest average business rates in the country. For example, Norfolk has an average business rate of £0.48 per pound of RV.
  • Enterprise Zones: The region boasts several enterprise zones offering business rate discounts to attract investment and spur economic growth.

Unique Challenges:

  • Rural-Urban Balance: Balancing the economic needs of rural and urban areas is a significant challenge, with rural businesses often requiring different support mechanisms.
  • Infrastructure Development: While urban centres like Cambridge thrive, rural areas lag behind in terms of infrastructure, which can hinder business growth.

Landlords in the West (Wales, West Midlands; Birmingham, Wolverhampton, etc) can benefit from the region’s push for business rate reforms, which aim to support diverse industries. Tenants in sectors like manufacturing and technology should explore available relief programs to reduce costs. Addressing high business closure rates through targeted support and incentives will be crucial.

Business Rate Overview:

  • Wales: Wales has its own system of business rates with various relief programs, including rates relief for high street and retail properties. The average business rate in Cardiff, for instance, is £0.535 per pound of RV.
  • West Midlands: The region has seen a push for business rate reforms to support sectors like manufacturing and technology. Birmingham’s average business rate is around £0.493 per pound of RV.

Unique Challenges:

  • Industrial Transition: Transitioning from traditional industries, such as coal mining and steel production, to modern sectors like tech and services.
  • High Business Closure Rates: Certain areas face higher rates of business closures, necessitating targeted support and incentives.

Across the South of the UK (South East England, South West England; London, Kent, Cornwall, etc.), Landlords, especially in London, face the challenge of high business rates but can attract premium tenants willing to pay for prime locations. Tenants should explore relief schemes to mitigate costs and consider the varying rates within the region to optimise their locations. Addressing regional disparities and high operational costs will require strategic planning.

Business Rate Overview:

  • London: London has some of the highest business rates in the country due to high property values. The average business rate in Central London can exceed £0.51 per pound of RV. Despite this, there are relief schemes available for small businesses, such as the Small Business Rate Relief (SBRR).
  • South West: The South West, with its diverse economy, shows varying business rates. For instance, the average rate in Cornwall is £0.488 per pound of RV, benefiting from rural relief schemes.

Unique Challenges:

  • High Costs: The high cost of living and doing business in London presents a significant challenge for both landlords and tenants.
  • Regional Disparities: There are notable disparities within the South East and South West regions, with coastal and rural areas often struggling compared to urban centres.

In Central Britain (East and West Midlands) Landlords should advocate for and benefit from competitive business rates designed to attract diverse industries. Tenants can leverage targeted relief schemes to reduce costs and invest in growth. Balancing industrial growth with sustainability and pushing for infrastructure improvements will enhance the region’s attractiveness.

Business Rate Overview:

  • Competitive Rates: The Midlands has been advocating for more competitive business rates to attract investment and support its diverse industrial base. For example, Nottingham has an average business rate of £0.49 per pound of RV.
  • Targeted Relief: Various local councils offer targeted relief schemes to support high street regeneration and boost local economies.

Unique Challenges:

  • Industrial Growth vs. Sustainability: Balancing industrial growth with sustainable development remains a challenge.
  • Infrastructure Needs: Improved transport and logistics infrastructure is critical to maintaining competitiveness and supporting business growth.

Conclusion

Understanding and navigating the complex landscape of business rates across the UK requires vigilance, strategic planning, and proactive engagement. By staying informed, ensuring properties are assessed correctly, and leveraging relief programs, commercial landlords and tenants can optimise their costs and thrive in their respective markets.

To stay ahead with the latest business rates news and changes, please subscribe to this Newsletter. You may also find it helpful to read real-life case studies of Business Rates saving reliefs and schemes here.

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