Business groups have widely welcomed the long-awaited announcement of a rates review confirmed by the Department of Finance on Thursday.
The review comes amid a growing clamour for fairer taxation in the retail sector. Launching it, permanent secretary Sue Gray said significant changes have taken place on the high street and acorss towns in recent years.
“It is critical from a business perspective, as well as a government funding perspective, that our rating system is capable of responding to this wider process of change,” she said.
“We must create a rating system which generates the funding our public services need while supporting businesses in all sector and enabling economic growth right across Northern Ireland.”
However, she warned that policy change was limited in the absence of Executive Ministers, but said it was vital to be ready with updated advice should the current or future talks prove succesful.
“This fundamental review is therefore a critical part of this process,” she said.
Aodhán Connolly, director of the Northern Ireland Retail Consortium (NIRC) said the review was crucial to fixing serious flaws in the present process.
“The fact that retail is 12% of the economy and pays a quarter of all business rates is simply not sustainable, especially give the seismic structural changes going on in the industry,” he said.
“We have some of the highest business rates in Europe and they are a disincentive to investing in Northern Ireland.
“We are already playing catch up to the rest of the UK on business rates reform where our businesses pay 12p in the pound more than the UK average.
“There must be equity in any new system that allows for a widening of the tax base and an audit of the plethora of exemptions some of which have been in place since the 1930s. If we don’t get business rates right, we risk further shop closures which will not only cost jobs but leave a gaping hole in NI finances.”
FSB NI head of external affairs, Roger Pollen, said the value of all small businesses needs to be recognised.
“We very much welcome this review. Rates are a disproportionate burden on smaller businesses and restrict their ability to invest, grow and create jobs.
“A significantly higher proportion of small businesses in GB are exempt from rates compared to their counterparts in Northern Ireland, and the benefit of enhanced rates relief announced by the Chancellor at the last budget was not passed on to firms here.”
In a joint statement, the CEOs of Retail NI and Hospitality Ulster, Glyn Roberts and Colin Neill, said the reiview had a “long-time objective”.
“Both our organisations are delighted that the Department of Finance have announced this review into non-domestic rates. We have consistently lobbied for this over a number of years and are pleased that our joint call has been heard”
“This review provides us with a roadmap for radical change to an antiquated and not fit for purpose system of business rates which is a major burden for our members”
“In this review we will be outlining significant changes to Rates, including our proposals for a targeted approach to small business rates relief, a revamp of the Rates Hardship fund, green rates rebate for business who invest in carbon neutral technology and greater relief for new start businesses.”
“At the last UK Budget, the Chancellor gave independent retailers and hospitality businesses a third off their rate bills in England. We want nothing less than this for our members in Northern Ireland.”
Rajesh Rana, president of Belfast Chamber said: “A fair rates policy with reductions for key sectors and a revaluation is something that we as a Chamber have lobbied very successfully on in the past and have a commitment to doing both now and in the future. Without Ministers in power this is very difficult which is why today’s announcement by the Permanent Secretary is so important and welcome.
“The businesses in Belfast City Centre contribute to 65% of the rates income of the entire City Council. Across all of Northern Ireland business rates remain an unfair burden, particularly on retail and licensed premises.
“High levels of rates deter investment and actually reduce Council income because of vacancies. It stunts growth and prevents businesses from getting past start-up phase.”