The government introduced the Non-Domestic Ratings (List) Bill in the House of Lords on 18 March 2020. The Bill was aimed at bringing forward the revaluation from 2022 to 2021 and moving revaluations from a five-yearly cycle to a three-yearly cycle. These plans have been put on hold for the time being following the government’s announcement.
Business rates are calculated in part by reference to a property’s “rateable value” which is based on a property’s estimated rental value. If the planned legislation had passed royal assent, it would have allowed the government to set business rates for a minimum of the next three years based on rents being paid on 1 April 2019, prior to the coronavirus pandemic.
Before the government’s announcement, some retail associations urged the government to scrap the 2021 revaluation and keep the revaluation originally planned for 2022 arguing that it was crucial for businesses to have a reference point for determining rates bills at a time post-coronavirus so that the impact of the crisis could be reflected in the assessment.
However, the government’s move to postpone the revaluation, has not been welcomed by everyone in the retail and leisure sector. Many have been calling for an overhaul of the rates system for some time now in an effort “to save the high street”. The decision to postpone the revaluation means that firms’ next rates bill will be based on rental values measured in 2015, pre-dating both Brexit and the coronavirus crisis.
In announcing the postponement of the revaluation, the government noted that it is continuing to work on the fundamental review of business rates with the key aims of “reducing the overall burden on businesses, improving the current business rates system, and considering more fundamental change in the medium-to-long term”. It appears all may not be lost therefore for those calling on drastic reform to the rates system, but they will need to wait longer.
For advice on commercial property issues please contact Ceri Riddell on 01223 532753 or click here to email her.
Government announces postponement to business rates revaluation
13 May 2020
The government has announced that the revaluation of business rates will now take place in 2022 instead of 2021. According to the government, the postponement is aimed at helping “to reduce uncertainty for firms affected by the impacts of coronavirus”. Ceri Riddell of Hewitsons explains.