Finance Minister Máirtín Ó Muilleoir has unveiled his proposals for a groundbreaking shake-up of the rates system, but immediately the Federation of Small Businesses has launched their concerns.
‘A Rates Rethink: Spurring Economic Growth’ includes a £22million investment in retail and hospitality businesses, the introduction of two pilot Business Empowerment Zones and removal of the domestic rates cap.
Commenting on the package, the Minister said: “I want to make sure that the rates system encourages regeneration, investment and entrepreneurship, while at the same time discourages dereliction and decline.”
Speaking about support for business, the Minister said: “I am announcing a groundbreaking approach to partnering local hospitality and retail businesses by directing a £22million stimulus towards those sectors which are key to the survival of our town and city centres.
“This will increase the average award for eligible businesses to two-and-a-half times the current levels under the small business rate relief scheme. It will mean that any business with a Net Annual Value of less than £10,000 will only pay 50 per cent rates while businesses right up to £25,000 NAV will get significant support. I am particularly pleased that the focus on hospitality enables me to align my proposals with the successful work to grow our tourism sector.”
Turning to regeneration area pilot schemes, the Minister said: “The introduction of business empowerment zones in east and west Belfast at a cost of £1million on a pilot basis shows we are willing to try bold new approaches to rebuild working class areas. These proposals will not work alone but will require joined-up approaches.”
Commenting on the rate levy on homes with a capital value over £400,000, the Minister said: “I believe that those who can afford to contribute to the rating system should do so. However, the application of a £400,000 cap means that those in houses with a higher value pay proportionately less than those in middle or lower value homes. I want to see this corrected with measures introduced to ensure a more proportionate contribution, while safeguarding elderly pensioners on low incomes who have remained in high value family homes.
“These are tough choices but our determination to modernise the rating system, support more jobs and to boost our town centres and high streets demands bold action.”
The proposals outlined by the Minister will be put forward for public consultation before going through the Executive and the Assembly.
A copy of the Minister’s full statement to the Assembly is available at:
FSB Fears Finance Minister May Double Small Business Rates
Proposals by the Finance Minister Máirtín Ó Muilleoir could see many thousands of businesses facing huge increases in their rates bills from next April warned Northern Ireland’s largest business organisation, the Federation of Small Businesses (FSB). The FSB is the largest business organisation in Northern Ireland, representing 6,000 business owners who operate across every section of our economy.
In a Ministerial Statement to the Assembly, the Finance Minister set out proposals to scrap the Small Business Rates Relief Scheme, resulting in many businesses seeing their rates doubled from next April.
Wilfred Mitchell OBE, FSB Policy Chair for Northern Ireland, said: “The FSB is deeply concerned at the proposals announced by the Finance Minister which, if they were to go ahead, would see the rates bill of thousands of our smallest businesses being massively increased; for many, they will actually see their rates bills doubled.
“The announcement is hugely disappointing, as it proposes to set small businesses against each other by attempting to ‘pick winners’ – to be paid for by hiking the bills of thousands of small firms to raise funds to give to pubs, cafes and retail chains. Those operating outside the retail and hospitality sectors would have a disproportionate burden at this time placed upon them, despite there being no evidence to suggest that sectoral targeting of rates relief in Northern Ireland would deliver any economic benefits.
“The Minister’s announcement had some welcome measures in it, but they are eclipsed by the damage that his proposals could to do to small businesses that may not have the ability to pay, at a time of great economic uncertainty and falling business confidence. Rather than making the system fairer or sharing the burden as he suggested, the Minister’s proposals risk distorting the balance by subsidising certain sectors at the expense of others.”
FSB also claimed that today’s announcement would put Northern Ireland’s SMEs at a significant disadvantage compared to those in in other parts of the UK, as this would be the only region without a rates relief scheme available to all of the smallest businesses.
Furthermore, for those businesses that would still qualify, the proposals would also see an end to the much-praised system of automatic relief at source, that has seen the bureaucracy of rates relief cut to a minimum.
Mr Mitchell also added that the FSB has campaigned for the maintenance of the current Small Business Rates Relief (SBRR) scheme, at this time of particular economic uncertainty, to provide some support and protection to the smallest business in every city, town, village and rural area across the region.
Small business confidence has plummeted in recent times, falling into negative territory for the first time in 4 years. FSB has called on the Executive to retain Small Business Rates Relief to bolster confidence amongst those firms who may be struggling in the wake of currency fluctuations, the rising cost of doing business and huge uncertainty around future trading arrangements within the EU and beyond.
The average saving for a business in receipt of SBRR is £700pa. It has been used to ease the burden of the rising cost of doing business for those who needed it the most, such as absorbing the government-imposed burdens such as the introduction of the National Living Wage, and Auto Enrolment Pensions.
