Richard Roberts, partner and head of the retail sector at Liverpool law firm Brabners claims business rate hikes of up to 70% in the South could force businesses to relocate up North. Tony McDonough reports.

Merseyside the the North of England could benefit from the imminent business rates revaluation which may cause firms to flee the South East.

From next month, the Government will adjust the rateable value of business properties to “reflect changes in the property market”.

Rates are currently set according to the open market rental value of a property on April 1, 2008.

Businesses across the country are bracing themselves for what they fear could be crippling rises and all eyes will be on Chancellor Philip Hammond on Wednesday to see if he will offer extra relief in his Budget.

Exodus up North?

However, Richard Roberts, partner and head of the retail sector at Liverpool law firm Brabners, claims the North of England could see an influx of businesses moving from the ultra-expensive London and the South East.

He told YBNews: “Ultimately, I think April’s changes will amplify a trend we’re already seeing – firms moving to the North.

“Most northern locations will see a reduction in business rates and even “hotspot” locations in the North – such as Manchester – will only see business rates increase by around 9%, which is manageable for most.

“But the rise will be far more dramatic in the South East where Reading, for example, is looking at a 70% hike.

“Major organisations such as RBS and the BBC have already relocated large parts of their operations to make the most of lower running costs.

“April’s revaluation is going to make Northern cities an even more attractive proposition for businesses of all sizes.”

Blow to SMEs

However, Mr Roberts highlighted that the alignment of business rates to property value puts SME retailers at a severe disadvantage.

He explained: “The real problem arises for businesses that can’t easily move away from locations where rates rises make trading unsustainable.

National retailers, with multiple branches, have the flexibility to exit those locations without a significant impact to their estate.

“Retailers with a small number of outlets, and that rely on high-street footfall, might be put in a more difficult position by the new rates.”