Airports set for bumper business rates amid £1.4bn tax rise
Business rates revenues are expected to rise by £1.4bn, or 4.9%, to £29.9bn when new valuations come into force on Saturday April 1.
Airports, power stations and business headquarters are set to be hit hardest by property tax changes when new valuations come into force next week, according to research.
Revenues from business rates – the property tax on commercial buildings – are expected to rise by £1.4 billion, or 4.9%, to £29.9 billion when the changes take effect from Saturday April 1.
The annual review by real estate advisory firm Altus Group has revealed that a raft of firms will be hit sharply by the increase, which comes after a new revaluation regime was announced last year.
In his Autumn Statement, Chancellor Jeremy Hunt announced a £13.6 billion package to help businesses with their new rates bills from April 2023, including freezing the tax rates, and discounts for 230,000 retail, leisure and hospitality premises.
The revaluation, the first in six years, will see Heathrow Airport top the list of UK commercial properties with the highest business rates.
Heathrow now has a rateable valuation of £210 million, despite a £2.83 million decline from the previous value.
It means the airport could save £1.51 million in tax.
Manchester Airport is also set to pay a smaller business rates bills after its value dropped by more than a fifth, or £6.7 million.
But it comes as other airports face potentially higher bills, with both Gatwick and Stansted Airports both set for large increases despite overseas travel being prohibited on April 1 2021, the date being used for the latest valuation.
Elsewhere, Swiss bank UBS, which it recently acquired Credit Suisse after it ran into financial difficulty, has seen the valuation on its sprawling 12-storey “groundscraper” UK headquarters rise by £7.46 million – up by more than a third to £27.52 million.
Meanwhile, Warner Bros Studios in Leavesden, Hertfordshire, a purpose-built film production complex, will see its valuation rise £19.81 million to £25.32 million – up 360%.
However, the studio will be protected by caps which will phase in the very large increase.
Alex Probyn, global president of property tax at Altus Group, said: “Revenue from business rates across the UK still remain well below pre-pandemic levels and, although revenue is forecasted to rise, receipts are still expected to be lower than at the start of the previous revaluation back in 2017.
But he added: “The return to inflationary increases in the tax rates, and the ending of the temporary enhanced retail discount in April 2024, will see revenue rise by a further £5.2 billion during 2024/25 to its highest ever level.”