Queen’s Speech confirms Government’s intention to move forward with reforms announced at Autumn Budget 2021.
Separate announcements made regarding the 2023 Revaluation and end date for appeal opportunities for the 2017 Rating List.
The Queen’s Speech earlier today revealed the Government’s intention to press forward with the changes announced following its Fundamental Review of Business Rates, which was followed by a technical consultation. This focused on the steps needed to move to a three yearly revaluation cycle in England.
As detailed in our December 2021 Update the consultation covered measures required to enable more frequent revaluations, improvement relief, support for investment in green plant and machinery and other administrative changes.
In a positive development the Chancellor announced in his Spring Statement that the green measures included in the consultation and planned for 2023 would be brought forward to 1st April 2022. This includes an exemption for green plant and machinery used in onsite renewable energy generation and storage, such as rooftop solar panels, wind turbines or battery storage where the rates liability will be removed from April 2022 until March 2035.
The Queens Speech documents refer to a Non-Domestic Rating Bill “to modernise the business rates system with more frequent revaluations based on more accurate data, aiming to drive growth by making rates bills more responsive to economic changes” which infers that some decisions may have already been made in advance of the publication of any responses to the consultation!
Last week the Government issued their latest Business Rates Information letter which included some important updates regarding the 2017 and 2023 Revaluations.
As anticipated the Government has confirmed its intention to introduce legislation which will mean that in line with previous Lists the last day on which ratepayers will be able to initiate the appeal process on the 2017 List will be 31st March 2023. We anticipate that ‘initiate the appeal process’ means having commenced the Check stage, of the three stage Check Challenge Appeal process.
As before there will be exceptions as follows:
a. where the VOA have amended the 2017 list in which case the ratepayer will have 6 months from the date of the VOA alteration; and
b. where the ratepayer believes their assessment is wrong due to a relevant court decision, in which case they will have 6 months from 31 March 2023.
More detail will follow when the regulations to implement these changes are brought forward.
There is no mention at this stage of an equivalent cut off point for the VOA to make changes to the 2017 List and at this stage we are still anticipating that this will be 31st March 2024 in line with the approach at previous revaluations.
The Government have confirmed that the decapitalisation rates in England for the 2023 revaluation will remain unchanged as follows:
Education, healthcare and defence – 2.6%
All other properties – 4.4%
This is reasonably good news for ratepayers where their valuations are undertaken on a cost based approach as any increases to these rates would have led to higher rateable values from 2023.
The VOA are now moving towards the final stages of their preparation for the 2023 Revaluation, providing their valuations for the Department for Levelling-Up Housing and Communities on a drip-feed basis, with final valuations due by the end of September. However, following a change in the legislation the draft list assessments do not have to be made available to ratepayers or published until 31st December at the latest. We have undertaken our own shadow revaluation exercise which allows us to estimate liability for properties from 2023 onwards. These forecasts are complicated by the high forecast inflation levels in the Autumn which normally feed through to UBR increases and uncertainty regarding the transitional arrangements which we are expecting the Government to consult upon in the Autumn. For the time being we are making our own assumptions regarding the potential UBR and can provide client estimates on this basis.
As always, we are here to discuss any specific issues regarding your properties and will keep you informed of further developments regarding business rates across the UK.