Thu 13th Aug 2015
Aug 15: A rating system for 21st century business community
The revaluation of non domestic or business rates which came into effect in April this year had as many ‘winners’ as ‘losers’, in that 52% of business owners saw their rates bill increase while 48% had a neutral outcome or saw their bills reduced. While it is probably fair to say that most of us are not exactly delighted when we receive our rates bill, a rating system is an inherent part of a democratic society and supports local and central Government in providing essential public services. We accept that and play our part by paying our rates.
However that is not to say that change is unwarranted in the way our rates are valued and levied. Rates collection and distribution is one area of tax which is now devolved across the UK, so the power to change the system lies entirely within the Assembly administration through the Department of Finance and Personnel.
To be fair to both the current DFP Minister and her predecessor, Arlene Foster and Simon Hamilton have not shirked the challenge and following the revaluation which concluded this Spring, a willingness to examine the entire complex and challenging issue was signaled and acted on with the announcement of a full review of the non-domestic taxation system in Northern Ireland. As a Chamber of Commerce we have engaged with Government as they set about identifying a suitable terms of reference for the review and we will remain engaged with the consultation process which we expect to see launched in the coming months.
Our members made their views known in the latest Quarterly Economic Survey, published in partnership with business advisers BDO. A massive 78% of NI business owners want to see the decades old system reviewed and consideration given to a system which more adequately reflects economic and business conditions. Particular concerns were expressed around the equity of the current system and members also asked for greater transparency around what their business rates actually pay for.
The dynamic of running a business has changed immeasurably since the current system was introduced in 1990 and in truth the principles underlying our non domestic rating system have been in place for centuries. That provides a challenge for Government but one which should be embraced. The Westminster Government has already initiated a review of the system as it applies in England recognizing its need to be fit for purpose for a 21st century economy. That may offer us a roadmap for our own review, but should not limit our ambition to devise a Northern Ireland rating system suitable for Northern Ireland’s 21st century business community.