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Business

Finance minister bottles decision on charity rates relief

Charity shops have become a common sight on Northern Ireland's high streets

BUSINESS rates in the north will be overhauled following a review of the ailing system - but the minister responsible bottles it after failing to end total exemption for charity shops.

Finance minister Mervyn Storey has been carrying out a consultation on the much-criticised rating system.

And after receiving more than 100 responses, he is recommending businesses be revalued every three years and that regional rates should increase "no more than inflation".

But while those changes will be broadly welcomed by the business community, Mr Storey chose to shy away from ending the total rates exemption currently enjoyed by charity shops.

Instead, he is leaving that one to the next finance minister who will take up post after May's assembly elections.

Charity shops have become an increasingly common sight on the north's high streets over recent years as they've been encouraged to take up vacant units with the incentive of zero rates.

More than a quarter of all responses to the consultation were from charities which showed unanimity in keeping the 100 per cent non-domestic exemption.

"The main argument being presented was that charities exist for the public benefit and that any revenue being allocated for rates, would represent a direct reduction in the overall level of public benefit," the report said.

However, despite 30 per cent of non-charity respondents saying charities could pay at least a limited amount of rates, the review made no recommendation on the issue.

Among those to respond were the Confederation of British Industry (CBI) which suggested "everyone should be paying something" pointing to the 20 per cent reduction for charity shops in Britain.

Meanwhile, the Northern Ireland Independent Retail Trade Association (NIIRTA) thought charities should pay around 25 per cent.

NIIRTA chief executive Glyn Roberts said there was "little scope" for making big changes with the Assembly in wind-down mode as it reaches the end of its term.

But he said he hoped the next minister would "hit the ground running" when chosen.

"There are much bigger issues such as the whole future of the rating system and whether we keep small business rate relief," he said.

A consultation on that scheme was also opened yesterday. It launched in 2014 but the department of finance is asking whether it is still an appropriate way of encouraging economic activity in town centres.

Mr Storey announced changes to business rates at an event in Ballymena business centre yesterday.

He said it was clear "there are no viable alternatives to the existing system".

"Many ratepayers have asked for the rating system to be more responsive and open. I want to try and address these concerns and have asked Land & Property Services to prepare for revaluations every three years - starting with the next one in 2019 - and at the same time provide individual ratepayers with a breakdown or summary of their new valuation.

"I'd like to see the next administration continue the commitment to keep regional rate increases at no more than inflation over the next multi-year spending review period. This would provide greater certainty for businesses and also ensure that government budgeting is even more forward thinking."

However he added: "It will be for the next executive to make decisions on the rating system and other matters, such as the sensitive issue of full exemption for charity shops."

Mr Roberts said reforming business rates "is now the top economic issue for the incoming finance minister to address post assembly election".

"We need radical reform of business rates and not merely small scale superficial changes," he said.

“With the chancellor announcing last week that many small retailers will now be paying no rates at all and a big extension in small business rates relief scheme in England, the NI Executive has some serious catching up to with reforming our business rates."

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