Rates revaluation brings good news for small firms and start-ups

Paul White - expecting a positive impact.

SMALL firms and start-ups could be among the big winners when the current revaluation process doubles the business rates relief threshold.

The change, which will take effect in April, will also be good news for property owners and could spark the revitalisation of some areas of Hull, with vacant units coming back into use.

Paul White, Agency Director at Garness Jones, said: “We particularly expect to see a positive impact in secondary retail areas such as Hessle Road, Holderness Road and Newland Avenue. Businesses are cost conscious but they may see these changes as an opportunity to move to the next level and give themselves more space to grow.”

The revaluation is the first since 2010 and is based on rental values from 1 April 2015. A key feature of the changes is that the threshold for small business rate relief will double to £12,000.

Paul, who specialises in retail and office accommodation, added: “Some places will see an increase but there are several areas in Hull where properties will fall under the new threshold and will qualify for 100 per cent business rates relief. That’s significant because buildings which have been boarded up or with shutters down will attract new interest.”

Dale Gooderham, Senior Agency Surveyor at Garness Jones and a specialist in industrial space, added: “There will be a lot of businesses who have been trading out of units that are a bit small for them and this change might help them expand into larger premises and grow their businesses whilst retaining reasonable levels of overheads.

“All areas have small start-up units which fall under the threshold because people want to encourage businesses into them. Some of the larger units that haven’t been built with that intention in mind will now come into play and we might see smaller businesses moving straight into what we would normally consider to be stage two units.”

Paul added that property owners may also benefit from the change. He said: “Over the last year or two we have seen small independent operators become very focused on cost and we’ve found that properties with a rateable value below £6,000 were a massive tick box.

“Doubling the threshold to £12,000 could lead to businesses committing to longer leases and could also enable owners to increase rents, because people might be prepared to pay more for larger premises if they don’t have to worry about rates. Even if they don’t need the space immediately they might see it as an investment in anticipation of growth, so we expect to see more start-up businesses looking at larger premises.”