Heathrow Airport looks set to top the list of UK commercial properties with the highest business rates when new valuations come into force next week.
The west London airport and others are on track to be among the hardest-hit sites by property tax changes, while power stations and business headquarters are tipped to be equally affected.
Revenues from business rates – the property tax on commercial buildings – are expected to rise by £1.4 billion ($1.71 billion) or 4.9 per cent, to £29.9 billion when the changes take effect from April 1.
The annual review by real estate advisory firm Altus Group has revealed that many companies will be affected sharply by the increase, which comes after a new re-evaluation regime was announced last year.
In his autumn statement, Chancellor of the Exchequer Jeremy Hunt announced a £13.6 billion package to help businesses with their new rates bills from April, including freezing the tax rates and discounts for 230,000 retail, leisure and hospitality premises.
The re-evaluation, the first in six years, will see Heathrow come out on top of the list of British commercial sites with the highest business rates.
The UK’s busiest airport currently 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.
Last week it emerged that airlines operating at Heathrow are on alert for an order from the airport that could require them to stop selling tickets over the busy Easter holiday period.
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 other airports face larger bills, with Gatwick and Stansted airports set for large increases despite overseas travel being prohibited on April 1, 2021, the date used for the latest valuation.
Elsewhere, Swiss bank UBS, which recently acquired Credit Suisse after it ran into financial difficulty, has had the valuation on its sprawling 12-storey UK headquarters rise by £7.46 million. This marks a jump of more than a third to £27.52 million.
Warner Bros Studios in Hertfordshire, a film production complex, will have its valuation rise £19.81 million to £25.32 million — up 360 per cent.
But the studio will be protected by caps that will phase in the very large increase.
“Revenue from business rates across the UK still remain well below pre-pandemic levels and, although revenue is forecast to rise, receipts are still expected to be lower than at the start of the previous revaluation back in 2017,” said Alex Probyn, global president of property tax at Altus Group.
But Mr Probyn said: “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.”
Updated: March 26, 2023, 11:01 PM