As the publication dates for the draft 2023 Rating Revaluation assessments approach we reflect on the current position across the UK and anticipated announcements over the coming weeks and months.
There were hopes that the mini budget last week would include some positive measures for ratepayers facing uncertainly as to the effects of inflation on rate liabilities for next year but disappointingly the only reference to business rates was in relation to the proposed Investment Zones.
The Valuation Office Agency and Scottish Assessors should by now be close to finalising their draft 2023 Rating List assessments for review and consideration by Government. Once these numbers have been provided the respective administrations will be able to reflect on movements in rateable value and consider how these impact on the UBR multipliers for next year and the options for transitional arrangements schemes. Over the last three years the multipliers have effectively been frozen, but this will be more financially challenging next year with the current rate of inflation running at circa 10%. There are added complications associated with revaluations when the UBR is adjusted in response to changes in the total RV for each country.
Historically UBRs have fallen at revaluation as a result of general upwards trends in overall rateable values and relatively modest inflation figures. At the 2023 Revaluation we are anticipating some dramatic falls in rateable value, particularly in the retail, hospitality and leisure sectors most heavily impacted by Covid-19 and the general decline in the high street as a result of the trend towards online shopping. Whilst there are expected to be large increases in other areas such as the warehousing and logistics sector, we are anticipating the UBRs to increase from 1st April 2023 unless the respective Governments are willing to forgo the inflationary element normally included as part of the UBR readjustment.
We anticipate that the Government in England will confirm the intended UBR for 2023/24 as well as the scheme of transitional arrangements around the time of the fiscal statement now planned for 23 November.
With many rateable values expected to fall, ratepayers will be hoping that the calls by business to remove downwards transitional adjustments (or penalties) are heard and that a scheme is introduced which offers protection to those facing the largest increases in liability without punishing those who should be seeing their bills fall.
Our timelines for England and Wales and Scotland plot the key dates along the road to 2023 and identify the deadlines for the draft list publication as follows:
England and Wales
We have undertaken our own shadow revaluation exercise to assist with budgeting and are able to provide estimates of rate liability for 2023/24 based on estimated rateable values and our estimated UBR’s.
In our recent update regarding the changes in Scotland we warned of the fundamental changes that the Scottish government has adopted for the 2023 Revaluation.
In addition to a reduction in the time frame for lodging appeals against the Valuation Roll from six months to four months the new regulations will also require detailed valuations and evidence to be provided at this stage. This means that ratepayers in Scotland will have to have taken the necessary action by 31st July 2023.
In effect this will mean that work will need to start on preparing appeals as soon as the draft Roll is published at the end of November.
Although the Welsh Government took the decision in 2017 not to harmonise with the Check Challenge Appeal system in England recent consultations have indicated an intention to move to a similar process from 2023. The first part of this consultation process covered the appeal process and a detailed consultation on other measures required to facilitate a three-year revaluation cycle was published last week. There are a number of similarities to the Technical Consultation issued in England at the end of last year (about which the Government’s decisions are awaited) and responses to the Welsh Government’s proposals are requested by the 14th December.
Finally, a warning regarding Government Gateway accounts set up for business rates purposes. We understand that the team at HMRC responsible for managing these accounts is currently undertaking an audit and closing accounts which have not been accessed over the last three years. One of the advantages with the current system is that once an account is opened and an agent is appointed there is very limited need for a ratepayer to access their account – this could lead to ratepayer accounts being closed by HMRC. We have flagged this point with the VOA and have asked for further clarification but whilst this is awaited, we would recommend that you log in and out of your gateway accounts as a protective measure.
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.