Case for three-yearly business rates revaluations put out by Government

The Government has laid out a case for three yearly reviews on Business Rates revaluations as part of its summer public consultation on the subject.

HM Treasury had previously put out a call for evidence in its Fundamental Review back in July last year and published those results in an Interim Report in March. The Final Report, setting out conclusions across the whole scope of the Review will be released this Autumn.

This latest standalone consultation focuses on more frequent revaluations, an area of reform that previous respondents identified as a priority in the call for evidence. The Government is calling for further input and evidence to inform policy development, including the trade-offs necessary to deliver different revaluation frequencies.

The system at the moment, under The Local Government Finance Act 1988, has 5-yearly revaluations. The first modern revaluation was implemented in 1990. The revaluations since then have been implemented in 1995, 2000, 2005, 2010, and 2017, with the 2015 revaluation postponed due to extreme economic conditions. The next revaluation takes place in 2023.

This latest consultation sets out specific proposals for achieving a 3-yearly revaluation cycle, which would both enable more-frequent revaluations, and potentially delivers other benefits such as more accurate valuations, greater transparency about how rateable values are determined and align business rates to current economic conditions.

The proposed reforms represents a significant change for both for the VOA, which is responsible for the revaluations system, and ratepayers who engage with the system. This consultation also seeks to test the Government’s emerging thinking on the viability of even more frequent revaluations, for example introducing a system of annual revaluations such as those used in Hong Kong or the Netherlands.

Other questions asked in the consultation include:

1 Does the proposed package of measures represent a fair and balanced trade-off for ratepayers between new benefits and new requirements? If not, please detail what adjustments you would like to see, to ensure a balanced package of measures that would support a 3-yearly cycle while taking account of deliverability constraints.

2 What steps could be taken to support ratepayers to comply with the new duties? For example, elements to reflect in the design of the reporting portal, or content that would be helpful to include in the supporting guidance.

3 Are you supportive of the proposed approach to Transparency? Are there further elements you think should be made available as part of a Transparency offer? (500 words)

4 What steps could the Government, stakeholders, or industry take to support a smooth move to a 3-yearly cycle?

5 Do you have any other comments on the proposed approach to the move to a 3-yearly cycle?

6 Do you agree that that moving to a three-year cycle should be the Government’s priority for this stage of reform, and that going further should remain an option for the future?

7 Would you support a move to an annual revaluations cycle or a shorter AVD in the future, accompanied by the necessary enabling reforms?

The full consultation can be seen here: Consultation_More_Frequent_Revaluations.

Responses have to be submitted by August 24.