Dr James Davies MP raises concerns about business rates in Wales
This week, Dr James Davies MP raised his concerns in the House of Commons about the inequality between business rates changes in Wales and England.
He said ‘My Rt. Hon. Friend will be aware that the setting of business rates in Wales is now devolved. Does he share my concerns that the small business rates relief scheme in Wales is less generous than that in England?’
A response was received from Rt. Hon. Alun Cairns MP, Secretary of State for Wales who said ‘My Hon. Friend is absolutely right and I can well remember walking the High Street in Prestatyn recently where business rates were highlighted as a major concern to some of the small shops on that High Street. He is right that it is devolved but of course my Rt. Hon. Friend the Chancellor, in his recent Budget, enhanced the Welsh settlement significantly as a result of supporting small business rates in England and I would hope that the Welsh Government will use that money to support small business in Wales.’
The rateable value of some properties – for instance in parts of Rhyl Town Centre – has reduced, and this is welcome and something that Dr James Davies MP has lobbied the Valuation Office Agency to bring about. The rateable value of many other properties has either remained static or increased below the rate of inflation. However, significant numbers have unfortunately seen an above-inflation increase.
Alongside this, many businesses are unhappy at the disparity between rates relief in England and Wales.
From April 2017, the UK Government extended 100% small business rate relief to properties in England with a rateable value of up to £12,000 (and tapered relief thereafter up to £15,000). In Wales the Welsh Assembly Government has chosen to limit small business rate relief to businesses with a rateable value of up to £6,000 (and tapered relief thereafter up to £12,000), meaning small Welsh businesses are strongly disadvantaged compared to their English counterparts.
To help small businesses with the impact of the revaluation, the UK Government is also reducing the rates multiplier in England. In Wales the Welsh Assembly Government has chosen to increase the multiplier, again disadvantaging businesses in Wales.
This means 52% of businesses in the Vale of Clwyd are receiving 100% rate relief but if these same businesses were based in England, 75.8% would be rate free with a further 3.8% receiving tapered relief they are not currently entitled to.
To compound the situation further, the UK Government has announced over £4bn in transitional relief for small businesses and pubs in England. This is equivalent to over £200m for Wales, yet the Welsh Assembly Government has offered transitional rate relief of just £20m.
Dr Davies MP said: “Since the announcement I have been actively lobbying the Welsh Government to reconsider their rates relief scheme as the disparity between England and Wales is simply unfair.
“I have also been working with individual businesses to support their appeals against the revaluation and would encourage any business to lodge an appeal if they feel they have reason to do so.”