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Commissioners clarify business rates proposal

24 February 2017

CHESTER CATHEDRAL

In business: Chester Cathedral gift shop

In business: Chester Cathedral gift shop

CHURCH property is unlikely to be significantly affected by government plans to increase business rates in April, the Church Commissioners have indicated this week. The Communities Secretary, Sajid Javid, announced the first revaluation of rates for seven years while Parliament was still in recess, last Friday.

Business rates are a tax on retail properties, including shops, cafés, pubs, and factories, which pay about half of the value of their annual rent in “relatable” rates. The move — which would mean a rise in rates of more than 30 per cent in some areas of the UK — was met with strong opposition from business lobby groups and high-street retailers this week, who say that they face “unfair” tax increases on their property.

Places of “public religious worship”, such as churches and church halls, are exempt from the tax in the UK, except in Scotland where relief for these buildings is applied, the Government says. But the Church Commissioners own a “limited number” of commercial properties in the Hyde Park Estate, and others via indirect holdings, as part of a consortium of landlords, a spokesman said on Tuesday.

“Commercial property holdings by the Church Commissioners form a relatively small part of our real-estate portfolio,” he said in a statement. “While the payment of business rates is a cost of occupying the property, we will readily listen to any concerns that our tenants may have.”

Cathedral shops are not always exempt, however. The Association of English Cathedrals states that, “where trading activities, whether shops, refectories or conference centres, are conducted by a separate company rather than the cathedral itself, a liability to non-domestic rates is more evident.”

The Government has said that nearly three-quarters of businesses around the country would see either no change to their bills, or a reduction, and that those businesses with a relatable value of less than £12,000 would be exempt from the tax. Mr Javid also pointed to a five-year “transitional relief” system, worth £3.6 billion, to support the “small minority who would see an increase” in fees.

“The revaluation of business rates will help make sure bills are accurate, with nearly three-quarters of businesses seeing a fall, or no change,” he said. “In fact, the generous reliefs we are introducing mean that 600,000 small businesses are paying no rates at all — something we’re making permanent so they never pay these bills again.”

But, under the changes, some councils are facing average rate rises of more than 30 per cent. Lambeth’s are to increase by 18.3 per cent. The constituencies of the Chancellor, Philip Hammond, in Runnymede and Weybridge; and the Prime Minister, in Maidenhead, are facing 13-per-cent and ten-per-cent increases respectively.

Mr Javid reportedly wrote to Conservative MPs on Monday in response to criticisms which, he said, had arisen from a “campaign of misinformation” against the announcement. “Unfortunately, this year’s revaluation has been preceded by a series of reports claiming that rates are going to soar, that appeals are being banned, and that hundreds of thousands of businesses will be forced to close. Such claims are simply untrue.”

Mr Hammond told MPs on Tuesday that he was “listening” to concerns.

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