SHOPKEEPERS in parts of Huddersfield are set to suffer the Kingsgate Effect.

The success of the shopping centre could mean business rates will rise dramatically for nearby shops.

The Valuation Office Agency - part of the Inland Revenue - says the centre's opening in 2002 has shifted the focus of shopping in Huddersfield, boosting the rental potential of nearby businesses.

Higher rental value means the agency gives a property a higher rateable value, which is used by Kirklees Council to calculate business rates.

The agency has just issued businesses countrywide with new rateable values, which will come into force on April 1.

The agency has reassessed the rateable values of businesses across the UK. This happens every five years.

Currently, businesses are paying rates calculated on 1998 rents. The new values will be based on 2003 rents.

An agency spokeswoman said that although rateable values could rise for properties near Kingsgate, businesses away from the new ``shopping focus" could see their value drop.

Some traders are unhappy about the new rateable values. Martin Stokes runs Huddersfield Electronics on Cross Church Street.

His rateable value will rise from £6,000 to £9,500.

If Kirklees Council keeps its current method of calculation, it will mean Mr Stokes paying rates of £4,332 a year.

He now pays £2,736.

Mr Stokes said: "It is an astronomical increase. I can't see how it is justified.

"Small businesses find it hard enough. It is scandalous to expect us to pay this much extra."

The VOA spokeswoman said that although rates were likely to rise, it may not be the case for some firms.

She said: "There are other factors. Also, tax rates for businesses will be cut to compensate for any rises in rateable value, with extra rates relief for small firms."

Kirklees said it may change the system it uses if rateable values rose a lot.

John Moore, of property agency Armitage, Hewitt and Hellowell, said: "Traders should not jump to conclusions about how much they will pay based on the rateable value alone."