Wales

Business rates rise 'could close rural shops' in Wales

Cowbridge High Street

Shops could close up and down Wales' rural high streets because of a rise in business rates in April, according to property experts.

Some £52m of business rates went unpaid in Wales last year and there are now warnings things could get worse.

Business rates is the tax business owners pay on their premises like shops, offices and factories.

The Welsh Government said the amount outstanding was a small percentage of the £943m collected.

Helen Edwards, a Cardiff-based senior associate at the international property consultancy Gerald Eve, warned the rise in unpaid business rates after April could be much steeper.

"There's the potential for it to increase, there are reliefs available but they are at the bottom end of the scale, so absolutely there is the potential for that to grow," she said.

"If people were struggling before there is nothing to suggest anything is going to become any easier for them."

Business owners in Cowbridge, Vale of Glamorgan, have joined those in Monmouth, who have already told BBC Wales they will be unable to afford the huge rises they face.

Ross Maclean, who owns the Cowbridge Book Shop, said he faced "almost certain closure" because his rate was increasing in real terms by 273%.

He said he still did not know what financial help he may be eligible for.

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Media captionCowbridge bookshop owner Ross Maclean said he was "shocked" by the rise in business rates

"That would be £400 or £500 rather than the £115 I currently pay a month. It makes a huge difference to the viability of a business when you are paying out an enormous amount in business rates," he said.

"Is it worth my while staying open? I don't earn a great deal now but it's enough to survive with my wife and two children, but it may be unaffordable to continue."

While the rates are collected by Welsh councils and then handed to the Welsh Government, they are set by the Valuation Office Agency - a UK Government body.

Business rates figures for Wales

£943m

collected by Welsh Government last year

  • £52m uncollected in 2015-2016

  • £32.5m unpaid in 2005-2006

  • £17m outstanding in Cardiff alone last year

PA

Ms Edwards said the rise in unpaid business rates coincided with a period of hardship for businesses.

"If occupying a shop on the high street is becoming exorbitant, yes you could end up seeing a lot more vacant properties, even more than we see already," she said.

"We have a limited number of big shopping malls compared to the other side of the bridge, our high street locations have been the heart and soul of our towns and it would be disappointing to see that change."

Image caption Helen Edwards warned that businesses were "struggling"

While business rates in rural areas are to rise, they are set to fall in most Welsh cities.

Cardiff council said it was looking at ways of keeping and reinvesting more business rates income under the new City Deal plan.

The Welsh Government said it was providing an extra £20m to help small businesses, on top of the existing rate relief, and £10m was being targeted at the high street.

A spokesman said: "While the majority of businesses in Wales have seen a reduction in their non-domestic rates following the latest revaluation, some businesses and some areas of Wales have been disproportionately affected.

"As a result of the support we are providing, more than three-quarters of all ratepayers will receive help to pay their bills."

The Welsh Local Government Association said it was working with the Welsh Government to help businesses but "timescales have been challenging".

"We hope to develop a scheme which is targeted to provide support where it is needed but is also as simple as possible to administer," a spokesman added.

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