Experts welcome O’Dowd's Small Business Rate Relief and vacancy measures but warn a fundamental overhaul of Northern Ireland’s rating system is 'urgently required'

Finance Minister John O’Dowd has announced plans to accelerate the strategic review of rates and progress changes in the business rates system.

Speaking in the Assembly Chamber, Minister O’Dowd said: “Less than a year ago, my Department committed to reviewing all rates support to deliver positive and progressive change to the rating system. Today, I can announce that every single rates support will have been reviewed by the end of the 2027/28 rating year.

“Following the Review process over the summer, it is now my ambition to progress enhanced support for small businesses, tackle the high level of vacancies in our towns and city centres, support businesses starting out and help accelerate business growth.”

Updating the Assembly on his desire to enhance Small Business Rate Relief support, Minister O’Dowd added: “Small businesses are the backbone of our economy. I want to see extra help going to those businesses that provide vital employment supporting workers, families, and communities.

“The Small Business Rate Relief currently provides vital support for operating costs for around 30,000 small businesses. The support delivered under that scheme has, however, remained unchanged since 2012.

“I want to create a fair environment for all businesses and plan to consult before the New Year, giving businesses the chance to share final views before changes are put to Ministerial colleagues on enhancements to the support.”

Turning to Non-Domestic Vacant Rating, the Minister continued: “What was clear from the Review was the need to challenge the blight of vacant properties in our villages, towns and city centres.

“It is my view work now needs to begin to elevate Non-Domestic Vacant Rating liability from 50% to 75% and then to 100%. I have therefore instructed my officials to take forward the policy work required to implement these changes which have the potential to unlock a further £20m of revenue between central and local government.”

In conclusion, the Minister added: “By taking the steps announced today, we continue to deliver a fairer, more progressive rating system - one that drives growth, supports new enterprises, and strengthens communities.

“We all know our finances are under significant pressure which is why I aim to deliver savings in parts of the rating system and redirect resources to provide additional support to those businesses that need it most.

“Delivering positive change will require buy-in, partnership working and the backing of Ministerial colleagues and the Assembly.”

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Responding Glyn Roberts, chief executive of Retail NI explained: “The Minister’s proposals are a significant step forward in enhancing the various Rates Relief schemes, and he has clearly listened to the concerns of our members.

“We welcome the plans to improve Small Business Rates Relief, phase out the Vacant Property Rate, and introduce an accelerator scheme to support businesses seeking to scale up.

“These reforms will make a meaningful contribution to tackling the dereliction crisis facing our high streets.

“However, our members continue to pay the highest business rates in the UK, and a fundamental review of the entire Rating System is urgently required to address this.”

Colin Neill, chief executive, Hospitality Ulster, added: "Hospitality Ulster welcomes today’s announcement from the Minister of Finance, particularly the increase in Small Business Rates Relief and the introduction of the Business Growth Accelerator, both of which we have lobbied for. These are small but positive steps in the right direction that will provide some breathing room for hospitality businesses that continue to face mounting pressures.

"We are also encouraged to see a commitment to take cognisance of the outcome of the Scottish review of the receipts and expenditure model (valuation based on turnover not square foot) used to estimate rateable values for pubs and hotels. For years, Hospitality Ulster has campaigned for a fairer valuation formula as the current model is grossly unfair and is need of urgent reform.

“However, it must be said plainly: a complete and fundamental reform of the property business rates system is urgently needed. The current model is outdated and continues to place an unfair burden on hospitality operators who are working hard to keep their doors open and staff employed.

"Looking ahead to the upcoming UK Budget, we call on the Executive to guarantee that any Barnett consequential funding generated by hospitality-focused measures is directed specifically toward relief for Northern Ireland’s hospitality sector. Businesses cannot afford for this support to be diluted or diverted. It must reach those who need it most."