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Delay to business rates revaluation cost BHS £75m, says Colliers

The delay to the business rates revaluation cost BHS as much as £75m over a five-year period, according to new research from commercial real estate consultancy Colliers International.

It said the retailer could have saved over £15m per year if the revaluation continued as planned in 2015.

The rates are recalculated every five years in the current system and the last revaluation was in 2010. In 2013, the government said it would delay the 2015 revaluation.

Colliers said thousands of retailers nationwide would have received a reduction in their business rates bill if the revaluation had gone ahead. It has estimated that around 90% of BHS stores would have received a reduction.

BHS currently has a business rates bill of £44m.

“The government decision to delay the business rates revaluation in 2015 certainly had an impact on BHS,” said John Webber, head of rating at Colliers. “It’s hard to know whether it was one of the final nails in the coffin, but clearly a £75m saving is a significant amount of money.

“Looking forward to the revaluation later this year, even in London – where we predict business rates increases for a lot of town centres - BHS could have saved something like £650,000 in rates.

“Given that almost every other retail centre in the UK is predicted to have a drop in business rates, some respite was on the horizon for BHS. The fact remains that the current business rates regime has done nothing to stimulate healthy high streets.”

Colliers is campaigning for an overhaul to the system, including more frequent revaluations, an increase in funding for the Valuation Office Agency to deal with its appeals backlog, and to “iron out inequalities where small business pays a higher proportion in business rates”.

 

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