16/12/2011
North's Large Stores 'Tax' Boosts Smaller Ones
The North is to introduce a controversal levy on large stores - but at a lower rate than originally proposed.
The 'Tesco tax' as it has been named means that large retailers might then limit investment - and cost job creation opportunities.
It emerged on Thursday that, on average big retailers will pay an extra charge of £66,000 a year, raising £5m that will be used to fund a rate cut for small shops.
However, the levy will be at a rate of 15%, not 20% as originally planned although it is expected to affect some 76 large shops.
The Stormont Finance Minister, Sammy Wilson, yesterday set out the Executive's final position on the large retail levy, which will fund an expanded small business rate relief scheme.
He told MLAs that these measures, along with a number of other rating changes, are intended to rebalance the rating system during the economic downturn, helping to create the right conditions for recovery.
The measures include broadly doubling the amount of rate relief provided to small businesses, with funding provided through a large retail levy, but the large retail levy is to be moderated from the planned 20% to 15%, with the shortfall paid out of a modest increase in regional rate revenue receipts, compared to what was budgeted.
"The Executive wants to create the right conditions for a sustained economic recovery, providing assistance to those small businesses that need it most. While the downturn has been difficult for a range of sectors this has particularly been the case for small businesses," he said.
The Minister explained: "I was particularly heartened to hear companies expressing the view that they remain committed to the Northern Ireland market.
"Having listened to issues raised during consultation, and given a modest increase in regional rates revenue since my original budget announcement, the Executive has agreed that the levy should be reduced from 20% to 15% on average. This will represent a saving of around £20,000 per store per year."
The DUP Minister continued, saying: "The money raised through the levy will be used to provide much needed additional support to small businesses, which continue to struggle during these difficult economic times. 20% relief will be provided to those businesses with a net annual value of £5,001 to £10,000, with around £6m likely to be awarded in 2012/13."
He also said there was considerable support for an expansion of the small business rate relief scheme: "I have taken on board concerns about help being provided to businesses that occupy multiple premises.
"To address this the Executive has agreed that for 2012/13 those occupying more than three business premises, in total, will be excluded from the small business rate relief scheme.
"Taking account of the views of interested parties I will also consider whether a more sophisticated approach can be adopted for 2013/14 and 2014/15. However, what will be paramount will be retaining an automated system," he added.
The Minister continued: "Given concerns expressed during consultation let me make it abundantly clear that the levy and expansion of the small business rate relief scheme will be time limited in legislation to three years, that is, until 31 March 2015."
Other changes being proposed will allow the use of non-commercial window displays in empty shops, without incurring a full rates charge.
In addition, changes will also be brought forward to clarify the valuation assumptions used at the next non-domestic revaluation planned for 2015.
In conclusion the Minister stated: "I will shortly be bringing forward legislation to give effect to these changes. I will be asking the Assembly to approve the legislation, and the use of accelerated passage, so that the final measures can be in place in time for next year's rate bills."
Ulster Unionist Finance Spokesperson, Leslie Cree has welcomed the Executive's endorsement of a scheme to levy a charge on larger stores and to use the revenue raised to finance a rate cut for smaller traders.
"This measure has the potential to raise approximately £5m, with 76 large stores paying an average around £66,000 each.
"It is of course absolutely vital that a balance is struck and that in seeking to provide help to small businesses we do not add to the burden of bigger stores to the extent where they are forced to cut jobs or even close stores, and I am satisfied that these proposals - limited as they are for a three year period - do indeed strike a sensible balance," he said.
(BMcC)
The 'Tesco tax' as it has been named means that large retailers might then limit investment - and cost job creation opportunities.
It emerged on Thursday that, on average big retailers will pay an extra charge of £66,000 a year, raising £5m that will be used to fund a rate cut for small shops.
However, the levy will be at a rate of 15%, not 20% as originally planned although it is expected to affect some 76 large shops.
The Stormont Finance Minister, Sammy Wilson, yesterday set out the Executive's final position on the large retail levy, which will fund an expanded small business rate relief scheme.
He told MLAs that these measures, along with a number of other rating changes, are intended to rebalance the rating system during the economic downturn, helping to create the right conditions for recovery.
The measures include broadly doubling the amount of rate relief provided to small businesses, with funding provided through a large retail levy, but the large retail levy is to be moderated from the planned 20% to 15%, with the shortfall paid out of a modest increase in regional rate revenue receipts, compared to what was budgeted.
"The Executive wants to create the right conditions for a sustained economic recovery, providing assistance to those small businesses that need it most. While the downturn has been difficult for a range of sectors this has particularly been the case for small businesses," he said.
The Minister explained: "I was particularly heartened to hear companies expressing the view that they remain committed to the Northern Ireland market.
"Having listened to issues raised during consultation, and given a modest increase in regional rates revenue since my original budget announcement, the Executive has agreed that the levy should be reduced from 20% to 15% on average. This will represent a saving of around £20,000 per store per year."
The DUP Minister continued, saying: "The money raised through the levy will be used to provide much needed additional support to small businesses, which continue to struggle during these difficult economic times. 20% relief will be provided to those businesses with a net annual value of £5,001 to £10,000, with around £6m likely to be awarded in 2012/13."
He also said there was considerable support for an expansion of the small business rate relief scheme: "I have taken on board concerns about help being provided to businesses that occupy multiple premises.
"To address this the Executive has agreed that for 2012/13 those occupying more than three business premises, in total, will be excluded from the small business rate relief scheme.
"Taking account of the views of interested parties I will also consider whether a more sophisticated approach can be adopted for 2013/14 and 2014/15. However, what will be paramount will be retaining an automated system," he added.
The Minister continued: "Given concerns expressed during consultation let me make it abundantly clear that the levy and expansion of the small business rate relief scheme will be time limited in legislation to three years, that is, until 31 March 2015."
Other changes being proposed will allow the use of non-commercial window displays in empty shops, without incurring a full rates charge.
In addition, changes will also be brought forward to clarify the valuation assumptions used at the next non-domestic revaluation planned for 2015.
In conclusion the Minister stated: "I will shortly be bringing forward legislation to give effect to these changes. I will be asking the Assembly to approve the legislation, and the use of accelerated passage, so that the final measures can be in place in time for next year's rate bills."
Ulster Unionist Finance Spokesperson, Leslie Cree has welcomed the Executive's endorsement of a scheme to levy a charge on larger stores and to use the revenue raised to finance a rate cut for smaller traders.
"This measure has the potential to raise approximately £5m, with 76 large stores paying an average around £66,000 each.
"It is of course absolutely vital that a balance is struck and that in seeking to provide help to small businesses we do not add to the burden of bigger stores to the extent where they are forced to cut jobs or even close stores, and I am satisfied that these proposals - limited as they are for a three year period - do indeed strike a sensible balance," he said.
(BMcC)
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