Retailers in Northern Ireland have labelled plans by the country’s government to impose a levy on retailers as “flawed” and “unfair”.

A tax has been proposed for retail premises in Northern Ireland to fund the expansion of a rate relief scheme for small businesses that was introduced on 1 April.

The proposed levy would be on retail properties at the GBP500,000 (US$769,174) rateable value threshold and above, which is the value attributable to a property on which the final rates bill is calculated. It should reflect the rental value of the property. To raise the required GBP6.5m would equate to an 11 pence regional rate supplement (at 2011/12 levels), increasing rate bills on those properties by around 20% on average.

The actual impact of the levy on bills would vary by district council area, from around 18.5% to 22.5%.

A consultation document states that the majority (just over three fifths) of the stores that would be affected are located outside of town centres. The largest concentration of stores – 19 – would be in Belfast city centre. Excluding Belfast, 80% of the remaining properties are located outside of town centres.

However, the proposal has attracted criticism from retailers. The Northern Ireland Retail Consortium has claimed that, according to government figures, only half of the money raised will go to shops that really need it.

The NIRC warned the levy would “pick the pockets of successful retailers and pass the benefit onto banks, bookies and bars”.

NIRC director Jane Bevis said: “The new tax the Northern Ireland Executive plans to impose on the retail sector is flawed from start to finish. Not only does it unfairly punish one of the sectors best placed to create jobs and attract investment, the funds raised won’t even reach their intended target.”

However, Northern Ireland’s government said that although around half of the GBP6.5m annual relief would go to retail premises, the preferred scheme is not restricted to small shops as the difficulties facing the small business sector go beyond that sector. A further 30% of the premises that stand to benefit comprise small offices and workshops, it said.

Finance Minister Sammy Wilson said: “My focus is on helping as many small businesses as I can through these tough economic times. I have seen for myself how many small firms all across Ni are struggling to make ends meet as the downturn continues to hit them hard.”

If the levy was implemented, it would apply from 1 April next year through to 31 March 2015. The consultation period is expected to end on 18 October.