The most recent rating revaluation came at a time when many leisure operators were already facing a daunting wall of cost increases. As a market reliant on the ebbs and flows of both overseas and domestic tourism, leisure parks and visitor attractions have faced more challenges than most in recent years. With business rates already being a major cost for leisure operators and set to rise sharply in the next financial year, understanding and planning for these changes is more critical than ever.

This article delves into the impact of Revaluation 2023 and the Autumn Statement, offering insights on rate calculations, budgeting with certainty and potential mitigation measures to help leisure operators weather this economic challenge.

Revaluation 2023

The 2023 Rating Revaluation saw all properties reassessed for rates purposes from 1 April 2023, for the first time in six years. Below are the key issues for leisure operators to consider in how rates are calculated and how to mitigate them:

• While new rates bills took effect from 1 April 2023, the key valuation date to which properties in England and Wales are now valued is fixed at 1 April 2021 when the long shadows of the COVID-19 pandemic were still very much in evidence.
• With rating assessments commonly based on trading potential, the new values should reflect how well placed an attraction was to respond and recover in the wake of COVID-19, based on the nature of the attraction, location, and target market. Critical factors include indoor versus outdoor attractions, domestic versus overseas markets, and the seasonality of trade.
• The Valuation Office are obliged to disclose how Rateable Values (RVs) are calculated. If this is not readily available, you may need to apply through the business rates portal to request your valuation.
• Any operator has the right to appeal their business rates – however, make sure you use an experienced advisor and be aware of the small print. Rates can go up as well as down; your advisor needs to ensure this risk is identified so you can budget more accurately.

At Gerald Eve we’ve seen substantial success helping leisure operators, both large and small, navigate these complexities of the rate revaluations, resulting in reduced rates and significant refunds.

When working with a family-owned attraction recently in the east of England, our negotiations saw the Rateable Value reduced by over 30%. This also generated an immediate refund in historic overpaid rates of over £150,000. Operated by the same family for over 50 years, the owners of this award-winning attraction have regularly invested in new attractions, including the addition of lodge accommodation in recent years, triggering a series of rates reviews. As a result, we secured three distinct rates reductions dating back to April 2017.

For another client, an international London attraction, COVID-19 had a devastating impact, especially so as it was geared towards the overseas market. For the 2023 Rating List we were able to pre-agree the Rateable Value at a level 45% below the previous assessment. As a result, our client saw a year-on-year reduction in their rates bill from 1 April 2023 of nearly £500,000.

Budgeting for 2024/25

In the recent Autumn statement, there was mixed news for ratepayers. Most worrying is the Government announcing that the UBR multiplier used to calculate rates bills would be increasing by 6.7% from 1 April 2024, for properties with an RV value of £51,000 or more.

There was better news for leisure operators with the confirmation that the existing Retail, Hospitality and Leisure Relief scheme would be extended to April 2025 with a 75% discount, albeit being capped at £110,000 per business and subject to subsidy controls, limiting its impact on those with multiple properties.

Upcoming legislation

The Non-Domestic Rating Act 2023 will introduce potentially onerous mandatory obligations on ratepayers to regularly update the tenure and physical details of all properties within their portfolios with the Valuations Office Agency (VOA).

Increasing the administrative burden on businesses, it will require prompt updates to the VOA and annual returns even where there are no changes, with penalty risks for non-compliance. The complexity of business rates management will increase with measures anticipated to be in place for the 2026 Revaluation.

While we have offered you insights into successful appeals, business rates mitigation and strategies for effective budgeting amid these economic challenges, we want to highlight the importance of expert guidance and proactive management to ensure you can sustainably operate in this evolving financial landscape.

If you have any questions on your business rates, please feel free to contact us.