The Finance Minister Máirtín Ó Muilleoir today announced a “ground breaking package of measures” to, in his words, modernise the rates system, including:
- Replacement of Small Business Rates Relief with a more targeted initiative that focuses on retail and hospitality businesses [further details to be announced] – the suggestion is that qualifying businesses with a NAV under £10,000 will only pay 50% rates and those with an NAV up to £25,000 NAV will get “significant support”.RHM Comment: We await further details and specifically the qualifying criteria that will be adopted.
- The introduction of Revaluations every 4 years, starting in 2019.RHM Comment: This is welcome and will help to fairly rebalance the rates burden between ratepayers in response to changing economic circumstances.
- Vacant rates relief being reduced from 50% to 25%, the initial 3 month exemption from vacant rates being abolished and the remove the exemption of former factories to encourage their sub-division/redevelopment.RHM Comment: This measure is premature given the high level of vacancy in NI compared to GB. Many former factories are located in areas where their sub-division or redevelopment is not viable and this measure will inevitably result in their demolition, which will remove the possibility of attracting a large employer back to the area.
- Reducing Rates Relief for Charities from 100% to 90%.RHM Comment: This is a balanced measure and could have been worse for charities given that relief is 80% across the water.
- The introduction of “Business Empowerment Zones” where rates relief will be used to encourage economic development, starting with pilot schemes in East Belfast and West Belfast.RHM Comment: This is positive initiative subject to the qualifying criteria (again to be announced) being clear and simple.
- Removing the £400,000 Capital Value cap on domestic rates.RHM Comment: This was inevitable in the context of the clamour for a “Mansion Tax” across the water but we suggest that a transitional relief scheme should be introduced to try and minimise the impact on the housing market and construction.
A copy of his Statement to the Assembly is attached.