A favourite UK shopping destination for visitors from the UAE looking for bargains on brands like Prada, Valentino and Balenciaga, could be about to lose some of its appeal thanks to a spike in commercial property taxes.
Bicester Village, the designer outlet shopping area in Oxfordshire, is set to be one of the biggest losers in April's controversial revaluation of business rates, according to analysis for The Sunday Times.
Bicester’s brands face average annual increases of 135 per cent when the £24 billion-a-year tax is updated, the Gerald Eve consultancy calculates.
Other top shopping names for UAE visitors, John Lewis on London’s Oxford Street and Harrods in Knightsbridge, face 57 per cent increases.
The rise in rates could soon be felt at the till as retailers increase prices to cover the extra costs. The recent fall in the pound – as well as refunds on VAT paid – has made shopping in the UK even more appealing for UAE visitors in the past year. By the busy summer travel season, some of this advantage could be eroded by higher retail prices, experts have warned.
A tax on places of work dates back to Tudor times, but the system in its current form was established in 1990, when Margaret Thatcher stripped local councils of the power to set levies and gave it to the Treasury.
The tax is calculated on the rental value of a property as estimated by the Valuation Office Agency, and is supposed to be recalculated every five years.
Although rises are capped at 42 per cent in the first year for big properties, Gerald Eve said Bicester’s stores would be paying 150 per cent more within five years as the rise comes through in stages, compounded by inflation.
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