What is going to deter international investment in the future? While uncertainty continues over how the UK economy will look after we have left the European Union, there is a more immediate concern about how business rates may affect future investment.
The Business Rates Deterrent
The owners of the Trafford Centre, Intu, together with Revo (formerly the British Council of Shopping Centres), recently commissioned research into how international retailers see potential UK investment. Of those polled, nearly three quarters are choosing to expand outside the UK because of the business rates system.
Research firm Conlumino asked 130 retailers about what they saw were barriers or incentives to investment in the UK, following the Brexit vote.
“It’s interesting that the research shows international retailers to be less concerned with Brexit and more focused on business rates,” Paul comments. “The survey also reveals that retailers view Britain’s sophisticated consumer market, strong labour laws and digital infrastructure as attractive qualities.”
“Survey results show that the UK still has great potential for overseas-based retailers, but for the issues around business rates”
Paul Giness, The Beattie Partnership
Retail continues to be a key player in the economy, employing some 2.9 million people. But business rates remain high and, with the rates revaluation, they are, for many, set to rise.
What Can Retailers Expect?
“At The Beattie Partnership, we conducted our own research, following publication of the draft rating list,” Paul explains. We concluded that retailers outside London may actually escape the worst of the rateable value increases.”
“However, if the general signal to investors is that rates are going to be a disadvantage, this impacts negatively on the sector as a whole,” continues Paul.
With the whole tone of the UK Government being set on the country being open for business, post-Brexit, the negative impact of business rates on potential international retail investment strikes a jarring note.
“The new rates regime does have an updated appeals process, and there will be transitional arrangements to phase in the changes,” Paul observes. “Whether this is enough to offset the negative perception of business rates in this country remains to be seen.”
To discover how you may be financially impacted by the new rates regime, please call The Beattie Partnership on 0161 228 2224 or visit bepart.co.uk.