Home Retail Harrods sees £15m drop in business rates assessment as retail undergoes dramatic revaluation

Harrods sees £15m drop in business rates assessment as retail undergoes dramatic revaluation

by Ozva Admin

Monday November 21, 2022 7:05 am

Harrods in Knightsbridge, London

Over half a million retail properties in England and Wales have now been reassessed with new assessed values, which will be used to calculate business rate liabilities from 1 April 20023 to 31 March 2026, and have been published showing a drop of 10 percent overall for the sector.

The Assessment Office Agency, an executive agency of Her Majesty’s Revenue and Customs, says 508,300 shops will see their taxable values ​​fall by 10 per cent overall, from £16.3bn to £14.6bn from April next. year.

Even as taxable values ​​fall across all regions for the beleaguered retail sector, experts say the reductions are not enough.

The appreciation of the 2.1 million non-domestic properties has been based on an estimate of open market rents as of April 1, 2021.

The latest revaluation came into effect in England and Wales on 1st April 2017 and was based on an estimate of the rents that were paid on 1st April 2015. The 2023 reassessment will reflect changes in rents paid during the interim 6-year period.

Analysis by property adviser Altus Group, Britain’s largest ratings adviser, shows that the largest shops – those over 1,850m2 – earn the most at retail as their assessed values ​​fall 34.7 percent.

harrods

Iconic London department store Harrods will see its assessed value drop 45 per cent from £32.73m to £18m next April, while Selfridges will see similar reductions with its assessed value cut from £30.5m to £16.82 million.

Large stores, those between 750m2 and 1850m2, will see an overall drop of 19.3 percent.

Hypermarkets and department stores, generally those operated by the 4 large supermarkets, will see their cadastral values ​​fall by 14.9 percent.

The biggest drop in assessed values ​​for the retail sector was 14.6 percent in Yorkshire & Humber and 13.9 percent in the North East.

But convenience stores will see their overall assessed values ​​increase by 12.7 percent, large food stores and smaller-format supermarkets will see their valuations increase by 8.4 percent, and hair and beauty salons will face a 6.3 percent rise, Altus Group added.

More than 400,000 small businesses, the vast majority of all properties in the retail sector, will see their cadastral values ​​fall by 8.4 percent and the cadastral values ​​of the entire retail sector will fall by 10 percent as a result of the revaluation which enters into force next April.

diminishing rents

But MSCI UK’s analysis of rent changes between the first quarters of 2015 and 2021, which tracks the performance of property investments with a total capital value of more than £149bn, shows that the sector Retailer experienced a 19.8% drop in rents in England, with an even steeper drop. decreases of 26.4% in Wales.

Robert Hayton, UK Chairman at Altus Group, explained to AM city this morning that while the retail sector was “undoubtedly a big winner from both the Fall Statement and the 2023 reassessment.”

“These modest reductions in most commercial properties are very difficult to square with the collapse in demand for new leases in the period around the valuation date during the final stages and immediately after the Covid restrictions,” it added.

In the Fall 2022 Declaration, the government announced that companies that see declining taxable value in the 2023 revaluation will benefit from the full decrease immediately by permanently removing limits on tax reductions, known as as a downward transition.

Special category description (SCat) property numbers Assessable Value 2017 (£) Assessable Value 2023 (£) Change (£) Percentage change
Large Premises (More than 1850 m2) 2,180 1,247,433 814,368 -433,065 -34.7
Large premises (750-1850 m2) 470 78,112 63,010 -15,102 -19.3
Hypermarkets/Superstores (More than 2500 m2) 2,200 2,858,811 2,431,783 -427,028 -14.9
factory stores 1,960 176,920 157,314 -19,606 -11.1
Retail stores and food stores 9,800 2,008,811 1,821,973 -186,838 -9.3
stores 423,690 8,060,613 7,387,370 -673,243 -8.4
amusement arcades 750 26,150 24,233 -1,916 -7.3
Salons/clinics within/part of specialty property 100 865 812 -52 -6.0
Stores within/part of specialty property 1,980 32,716 31,320 -1,396 -4.3
Sales Kiosks 5,450 68,256 67,190 -1,066 -1.6
betting offices 4,120 71,247 72,181 934 1.3
Markets (Other than Livestock) 710 23,474 23,824 350 1.5
airport rentals 340 136,439 139,519 3,080 23
Pharmacy 1,480 23,078 23,633 555 2.4
Mail offices 2,160 32,087 33,406 1,319 4.1
Hairdressers/Beauty Salons 23,350 153,449 163,068 9,619 6.3
Exhibition halls 8,230 227,765 242,740 14,975 6.6
Kiosks within/part of specialty property 690 8,610 9,235 625 7.3
Takeaway shop (predominantly off-premises) 5,000 41,940 45,103 3,163 7.5
Large Food Stores (750-2500 m2) 2,950 651,013 705,502 54,489 8.4
farm shops 1,600 14,945 16,605 1,660 11.1
Convenience store 7,250 257,547 290,306 32,759 12.7
Pharmacies within/adjacent to surgery/health center 1,850 50,642 57,688 7,046 13.9

Business rates are calculated by multiplying the assessed value of business premises by the multiplier which the government says will be frozen by keeping the small business multiplier and standard multiplier at 49.9p and 51.2p respectively before any relief is applied eligible.

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