Business rates revaluation postponed
— 12 May 2020 15:15:03 by Philip Manning
A revaluation of business rates will no longer take place in 2021, helping to reduce uncertainty for firms affected by the impact of Coronavirus, Communities Secretary Rt Hon Robert Jenrick MP has announced. Legislation had previously been introduced to bring the next revaluation forward by a year from 2022 to 2021.
“We have listened to businesses and their concerns about the timing of the 2021 business rates revaluation and have acted to end that uncertainty by postponing the change”, Mr Jenrick said. “Now is the time for us to continue to focus on supporting businesses affected by the pandemic, including through our unprecedented package of almost £10bn in business rates relief.”
A revaluation is the review of the rateable values of all business and other non-domestic property in England at a particular date. For some time, revaluation has been carried out at 5 yearly intervals but, despite the Government’s desire to ensure that business rate bills more accurately reflect up-to-date property rental values by undertaking them more frequently, the 2015 revaluation was postponed until 2017, seven years after the previous revaluation. Now the first 4 yearly revaluation is to be postponed to a date still to be announced.
Whilst this postponement is, in our view, sensible given the difficult economic climate that businesses are facing and their understandable need for certainty in relation to running costs, the Government now have the difficult job of deciding the date of the next revaluation and, perhaps more importantly, the Antecedent Valuation Date (AVD) ie. the date on which all non-domestic properties are actually valued, normally 2 years before the revaluation date.
Reinstating a revaluation date of 1st April 2022 would mean an Antecedent Valuation Date of 1st April 2020, which could be fraught with problems due to the lack of rental evidence and the inevitable doubts that could raise in the accuracy of the rating list and the number of appeals it could generate. Given the work already undertaken by the Valuation Office Agency in compiling rental evidence as at 1st April 2019, with a 2021 revaluation in mind, the Government could retain that as the AVD. However, rental values for different property classes in different locations can change significantly in three years, again making the rating list out of sync with reality.
It’s very much a case of ‘watch this space’. In the meantime, should you wish to discuss any rating concerns, contact Philip Manning (FRICS), Partner at GS&P and Business Rates expert.