The NI Finance Minister Sammy Wilson made the following surprise announcement this morning:
"I want to rebalance the system of business rates, and my Department will be bringing forward proposals to significantly extend the small business rate relief scheme - effectively doubling the current position of reliefs. I will be looking to cross subsidise this by applying a levy to large retail properties, including major out of town shopping developments which have not fared too badly during the downturn compared to our smaller businesses. My department will of course need to address the impact of this and consult on it before final decisions are made and the details worked out - but when it is done I would wish the legislation to be quickly passed by the next Assembly - to allow these changes to occur for the following rating year from April 2012".
Nick Rose commented that “this was a surprise to us all in the property sector because a similar scheme was recently announced and then withdrawn in Scotland following representations from the British Retail Consortium. This kind of measure is a very blunt instrument that could hit the businesses it is designed to help. For instance, the M&S store at Sprucefield would be hit by the levy but so would House of Fraser, Debenhams, M&S, Boots and Next in Belfast. This could deter badly needed investment in our City Centres.
It also raises the issue of fairness because a small number of companies would shoulder the burden of the levy. Those companies are large employers and the effect of this additional tax could be a loss of jobs at a time when the retail sector is struggling to recover from the longest and deepest recession in living memory. The timing could not be worse.”