Brexit implications for England & Wales business rates

Stuart Hicks, Manchester Office, Director - Dunlop HeywoodBy Stuart Hicks. Director.

With the UK’s withdrawal from the European Union only days away, regardless of what trade agreement we end up with, it is going to have a  profound effect on most business sectors across the union.

There is a broad consensus in existing economic research that Brexit is likely to reduce the UK’s real per capita income in the medium and long term but there has been little or no analysis on how Brexit could or will impact on business rates – a significant revenue for the Government and huge tax burden on the majority of UK businesses.

As I have looked ahead to the next business rates’ revaluation in 2021, I pulled together this “White Paper” which examines whether any elements of the post referendum uncertainty, or indeed the Brexit departure and disruption itself, could be properly construed as a ‘material change in circumstances’ (an ‘MCC’).

If so, that could give rise to a reduction in the rateable value (‘RV’) of a property in respect of the 2017 non-domestic rating list (the ‘2017 List’) and potentially the 2021 non-domestic rating list (the ‘2021 List’) where the antecedent valuation date (the ‘AVD’) is 1 April 2019.

You can find a link here to the full PDF paper, but the fundamental questions that need to be addressed are:

a. Is Brexit a change affecting the physical state or physical enjoyment that affects the property; and/or

b. Is Brexit a wider change that is physically manifest in the locality which needs to be considered when assessing the property’s rateable value?

Any ratepayer only needs to succeed on either of these propositions for the question to move to one of valuation and then possible appeal but the appellant will need to show that Brexit has affected property value and the outlook of the industry in each case. Scotland and Northern Ireland are also covered in the paper as they have slightly different systems.