Recent economic indicators suggest that Northern Ireland’s economy is demonstrating encouraging signs of recovery. This month, Ulster Bank’s Growth Tracker indicated that the region had the strongest business activity expansion across the UK in July and The Office for National Statistics (ONS) reinforced this positive trajectory, reporting a 0.6 per cent growth in GDP between April and June. These figures highlight the sector’s resilience but also signal opportunities for businesses to thrive in the evolving landscape.
It is essential for business owners, both new and established, to focus on the fundamentals that can support sustained growth says Sinead Campbell, Head of Money, Debt and Quality at Advice NI.
Sinead said, “Among these, understanding and effectively managing business leases and rates are critical components that directly impact your bottom line. Whether you are a new entrepreneur or an established business owner, the complexities can be daunting. At Advice NI our mission is to provide practical support and guidance to help business owners effectively manage their financial responsibilities and avoid falling into unmanageable debt.”
Understanding Business Leases: The Essentials
A lease is a legally binding agreement that allows you to use a property for a specified period. It outlines the rights and responsibilities of both you, the tenant, and the property owner, or ‘landlord’, explains Sinead.
She continues, “Key terms in a lease will include the rent amount, any additional costs such as insurance or service charges, and the services the landlord must provide. When beginning a new lease, it is crucial to thoroughly review this to understand these terms, known as ‘covenants,’ and what costs are involved.
“Since a lease is a legal commitment, seeking legal advice before signing is essential, especially for understanding clauses related to rent reviews, maintenance, and renewal terms. This helps ensure the terms are fair and legally sound.”
Sinead adds, “Our Business Debt advisers can help identify any debt owed and connect you with appropriate legal support for lease disputes. Properly understanding and managing lease obligations is key to avoiding financial difficulties.”
Navigating Business Rates: What You Need to Know
Business rates can be a significant financial burden, yet they are often an overlooked aspect of operational costs according to Sinead.
She explains, “Rates are calculated based on the property’s rateable value, which is set by the local council. It’s crucial to regularly check that your property’s valuation is accurate, as this directly influences your rates bill.
“If you believe your business is overpaying, there are mechanisms in place to challenge the rateable value. Additionally, various reliefs are available, particularly for small businesses or those in rural areas. Ensuring that you’re taking full advantage of these can significantly reduce your rates liability.”
Practical Advice for Businesses Facing Financial Challenges
“Even with the best planning, businesses can encounter financial difficulties, particularly in managing lease payments and rates”, Sinead adds.
“Open communication is key. If you’re struggling with lease payments, it’s crucial to communicate with your landlord as early as possible. In many cases, landlords may be willing to negotiate payment terms or temporary relief to help you navigate tough times.”
Sinead concludes, “Don’t hesitate to seek professional guidance when dealing with complex lease negotiations or rates disputes. Our business advisers at Advice NI can provide valuable insights and help you explore all available options, ensuring that your business remains on a stable footing.”
Advice NI and the Independent Advice Network is made up of 64 members and more than 300 advisers across Northern Ireland, all providing free, impartial, and confidential advice. Struggling businesses can call 0800 915 4604 or email [email protected] where they can speak directly with a business debt adviser between 9am and 5pm, Monday to Friday.
