The government’s decision to introduce 21 enterprise zones across England is sure to be welcomed by businesses that find themselves within the designated areas. Preferential treatment in terms of relaxed planning regulations and corporate tax breaks have been designed to stimulate growth in deprived areas. But what of businesses that fall just the wrong side of the fence? Well, the concessions inside the zones may not leave them too far out in the cold.
? Properties inside the zones are eligible for a business rate discount worth up to £275,000 over five years, but properties just outside the zone may be eligible for a discount of up to 25%.
? Extra competition from properties paying lower occupational costs inside the zones may result in a reduction in rent just outside.
Businesses close to an enterprise zone will also benefit from improved transport services and infrastructure and an enhanced labour market.
But such opportunities will vary from region to region. Areas assigned EZ status are not homogeneous and some, such as London’s Royal Docks, will offer more opportunities to nearby businesses than others do. More information is needed from the government on where the final zones will be and how they will be funded before all opportunities can be fully understood.
Peter Chapman is partner and head of ratings at Cluttons
