Report reveals that business rates in Larne are higher than London
A SMALL business trading from modest premises in a town like Larne can expect to pay up to three times more in rates than if operating in London, a new report claims.
Its authors have calculated how some 130 businesses operating in typical Northern Ireland high street will, over a three-year period, expect to pay £1.25 million more in rates than would be case if they were in Scotland.
And they say they have identified a "wide range of failures" in respect of policy development in the areas of small business rates including failure by the Department of Finance to disclose financial links, a lack of fairness in establishing a review of the small business support scheme, a lack of evidence in respect of key assumptions being used to redefine policy, and misleading assumptions underpinning consultation with the sector.
Larne businessmen Tom and Paul McMullan are now demanding that the NI Affairs Select Committee at Westminster conducts an inquiry into business rates in Northern Ireland and have lobbied MP Sammy Wilson in support of their campaign over "ridiculously high" rates, which also has the backing of industry bodies like Retail NI and Hospitality.
Over the past number of months the brothers have been compiling a report which sets out in detail the significant comparative disadvantage faced by the north's small business sector compared to Scotland, England and Wales.
They have documented and evidenced the much higher poundage applicable in Northern Ireland than anywhere else in the UK and set out how poorly the rates relief scheme available to small businesses here compares with those available elsewhere in the UK.
"We have also laid out how, over the last three years, some £120 million to £130 million has flowed into the local block grant as Barnett consequentials as a result of additional support to small businesses in England but which was not used to support the Northern Ireland small business sector, thus further significantly disadvantaging business here," Tom told the Irish News.
"We have identified how a small business operating out of premises with a similar net annual value (NAV) can expect to pay up to three times more if they operate (for example) in Larne as compared to operating in London."
In Britain a small business with a NAV of up to £5,000 gets a 100 per cent discount on its rates whereas in Northern Ireland the discount is 25 per cent, generating a rates bill of around £2,200.
In Scotland and England, a small business with a rateable valuation of up to £12,000 again gets a full rates against 20 per cent in Northern Ireland, meaning an annual rates bill of some £5,700.
"Combining the higher poundage, the much lower level of small business support and the failure to translate Barnett consequential to the small business sector, it leaves Northern Ireland in a position that a property with the same NAV pays less rates in London than it would in Larne," Mr McMullan said.
"So at the £5,000 and £12,000 NAV data points, the London business escapes all liability for business rates while on the other hand the Larne business will have to pay a rates bill of £2,402 and £6,149 respectively.
"No wonder Dick Whittington headed to London and not Larne!"
He adds: "In the continued absence of devolution there is a need for an urgent independent inquiry by the Northern Ireland Affairs Select Committee into the impact of the non-domestic rates burden on the Northern Ireland small business sector.