Government issues consultation on more frequent revaluations

Consultation on More Frequent Revaluations

This is the first substantive response from the Government following the call for evidence in respect of the fundamental review of business rates that was issued last year. As noted in our update of 25th March the interim report issued as part of the “Tax Day” announcements was merely a summary of the responses made last year.

The full consultation document is available here and responses are required by 24th August.

The document sets out the case for 3 yearly revaluations. This is not the first time that a consultation on revaluation frequency has been issued – the Government issued a similar consultation in 2016 with the same recommended outcome but failed to introduce legislation to deliver these.

Businesses have been pushing for more frequent revaluations for a number of years so that rateable values and thus rates bills adjust more swiftly to changes in the economy and property market and we do welcome this as a step in the right direction.

However our calls for more frequent and ultimately annual revaluations have always been on the basis that the period between the valuation date and the coming into force of the new assessments should be reduced from 2 years as at present, to 12 months at the most in order to reduce the possibility that rateable values will be out of date by the time the revaluation arrives. Whilst the consultation accepts this point it does not believe that a one year gap is deliverable at this stage. This is a view that we will challenge especially bearing in mind some of the measures that are being proposed to enable the move to a three yearly cycle.

These include:

• Introduction of a new “Duty to Notify” of changes to the occupier or changes to relevant property characteristics
• Introduction of an annual tenure confirmation return
• Restricting compiled list challenges to the first 3 months of the revaluation
• Introducing a fee for making a Challenge (refundable on success in a similar way to appeal fees)
• Providing some greater transparency on valuations earlier and outside the appeal process.

We will be submitting our own response – as well as assisting the many trade organisations and professional bodies we work alongside in preparing their own – but we would also encourage you to submit your own response and would welcome your views on the proposed changes. We would of course be very happy to assist you with this process.

These proposals include significant changes many of which appear to put more onus on businesses whilst restricting the opportunity to challenge rateable values and in our view these issues are too important to be dealt with by way of only an eight week consultation period. We are fearful that the Government could make the same mistakes as when introducing Check Challenge Appeal paying little attention to the legitimate concerns of businesses and pushing though changes in a rushed manner.

Covid 19 MCC Legislation

As advised back in March the Government is legislating to rule out the possibility of rateable value reductions as a result of material changes of circumstances linked to Coronavirus.

The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill has been progressing through Parliament, completed its Second Reading in the House of Commons on Monday and is now proceeding to the Committee stage. We were hopeful that this process would be completed before the summer recess as the Government has insisted on not issuing any detail regarding the additional £1.5 billion relief fund for businesses which have not benefited from the rates holiday until the Bill becomes law. However, with Summer Recess starting on 23rd July, we doubt it is possible for the Bill to become law until the autumn. We are continuing in our campaign to persuade the Government to bring forward the guidance on the fund and to seriously consider increasing the pot in order that all those businesses that need help will benefit adequately.

At the end of last week Scottish Government confirmed that they intend to follow Westminster and legislate against Covid MCC appeals but with the Scottish Parliament already in recess for the Summer, this will not progress until Ministers return at the end of August.

Northern Ireland Revaluation

The Finance Minister has recently announced another revaluation for Northern Ireland in 2023. For the first time this will coincide with the planned revaluations for England, Scotland & Wales. However, the AVD will be 1 October 2021 as compared to 1st April 2021 in England and 1st April 2022 in Scotland.