The Government is seeking feedback on plans to increase the frequency of business rates revaluations.
The Treasury yesterday started a consultation on the measures which could see revaluations take place every three years instead of the current five. This is part of a wider review into business rates which will be published in the autumn.
Business rates currently raise approximately £25bn in England a year with devolved decision-making to Scotland, Wales and Northern Ireland. The current system is based on the rateable value (RV) of a property that is calculated every five years, and so businesses paying rates based on the value of a location that might not reflect the current value after fluctuations such as we have seen in recessions and retail footfall declines in recent years.
Jesse Norman, financial secretary to the Treasury, said: “As our economy is recovering, we are supporting businesses to build back better. Proposals set out in this consultation would mean that valuations more quickly reflect how the economy is performing, making the business rates system more accurate and responsive, while balancing the burden for ratepayers.”
The potential to change the revaluation was first announced in the Queens Speech back in November and is part of a wider review that was launched in July 2020. The Treasury’s review is focussing on reforms to the current system to make the tax more sustainable, streamline its administration as well as look at possible alternatives. The issue that has held back meaningful reform for some critics is the Government’s insistence that any changes must be tax neutral, i.e. revenue currently collected by the Government and local authorities will not be lower than before. That in all likelihood translates into more winners and losers within the system as concessions in one sector will have to be clawed back from another.
The review is also looking into the role of business rates in funding local government, the challenges posed by possible reforms and the implications for devolved administrations.
A previous call for evidence found that more frequent revaluations were a priority for respondents and the government hopes most frequent revaluations will improve the accuracy of valuations via a more regular flow of information, streamline the appeals system, and provide ratepayers with increased transparency around their valuations.
The Government previously agreed to undertake more frequent valuations, bringing the next valuation forward to 2021, however the pandemic delayed this to 2023. The last revaluation were carried out in 2017.
More details on how to contribute to the revaluation consultation can be found here Business Rates Revaluations Consultation Launched – GOV.UK (www.gov.uk)