Colliers International reports struggling retailer is overpaying
Struggling department store Beales is the latest victim of the business rates system, according to John Webber, Head of Business Rates at Colliers international.
Beales’ 22 regional stores are reportedly paying a total of £2.847 million in business rates this year- but according to estimates by Colliers this is more than they should be – all due to downwards phasing introduced following the 2017 Revaluation.
Adding up the four years of overpayment by Beales, Colliers estimate the retailer has paid £1.060 million in business rates more than it should have in the years since the revaluation.
Beales saw a 14 per cent decline in its rateable value in the 2017 Valuation and therefore should have seen a 14 per cent reduction in its rates bill. In reality it only saw a 3 per cent drop in 2017/8 and in subsequent years the drops were -1 per cent and -2 per cent.
John Webber commented: “Of course Beales is not alone. Many other stores who have joined the long list of CVAs and administrations since 2017 have suffered in a similar way. A number of Debenhams and House of Fraser stores on the closure lists were there because they were paying artificially high business rates due to phased downwards transition. Toys R Us suffered the same fate and was paying many hundreds of pounds worth of business rates bills higher than it should have been.
“There is one chink of light at the end of the tunnel. We are about to see a new Revaluation in 2021 and given retail rents have collapsed, business rates falls should in theory follow. Of course, the government could put a spanner in the works and again introduce downwards transition as it did in 2017, limiting reductions. But that would be disastrous.”
