Northern Ireland

Northern Ireland business rates review announced

Money - mostly £50 notes Image copyright Getty/Norasit Kaewsai
Image caption Some companies in Northern Ireland feel the rates system is an unfair financial burden

The Department of Finance has announced a major review of the business rates system in Northern Ireland.

Rates are the property taxes paid by businesses.

Some companies, particularly in the retail sector, complain that the system has become an unfair financial burden.

Sue Gray, Permanent Secretary at the Department of Finance, said: "In recent years, significant changes have taken place in our high streets and town centres."

She added: "It is critical from a business perspective, as well as a government funding perspective, that our rating system is capable of responding to this wider process of change."

'Not sustainable'

The rates issue is a devolved matter, and a Stormont minister will need to be in place to implement any recommendations that emerge.

The first stage of the review will involve experts in urban regeneration, taxation and retailing assessing the changes that have taken place in town and city centres.

That will happen at the start of July and will guide further work conducted by the Department of Finance.

Aodhán Connolly, director of the Northern Ireland Retail Consortium, said: "The fact that retail is 12% of the economy and pays a quarter of all business rates is simply not sustainable especially give the seismic structural changes going on in the industry.

"We have some of the highest business rates in Europe and they are a disincentive to investing in Northern Ireland."

The department last conducted a review of rates in 2016, but the Stormont crisis meant it was never acted on.

Northern Ireland has been without devolved government for more than two-and-a-half years, after the DUP and Sinn Féin split in a bitter row.

Attempted changes

At the time of the last rates review, then finance minister, Máirtín Ó Muilleoir, proposed a number of changes, including increasing the rates charged on empty commercial properties.

There were also proposals that charity shops and halls of residence for students would have to start paying rates.

Business rates are currently based on a property's net annual value (NAV).

NAV is an assessment of the annual rental value that the property could reasonably be let for, at a fixed point in time.

The NAV is then multiplied by the "rate in the pound" to produce the annual bill.

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