The deadline for submitting responses to the Government, following the publication of the ‘Business Rates Review final report’, of 27th October 2021, is now looming.

To have your say, respond to the Government, using the following link: Business Rates Review: technical consultation

The areas covered, aiming at implementing the detail within the report, include –

  • Measures to enable more frequent revaluations
  • Improvement relief
  • Support for investment in green plant and machinery
  • Other administrative changes, relating to the central list

The most fundamental changes, are those aimed at enabling the Valuation Office to deliver a shorter revaluation cycle, of 3 years, from 1st April next year, with the 2023 and 2026 Rating Revaluations confirmed.

With the aim of being able to deal with all Rating Appeals within the Revaluation cycle, the Government is proposing a short time limit to appeal, of only 3 months, from 1/4/2023. This notably is 3 months shorter than the current limit in Scotland and it gives Ratepayers very little time to make an appeal decision. If this proceeds, it will be interesting to see if this leads to a large number of appeals; a return to the speculative appeals the Government have been looking to avoid, under the 2017 Rating List, Check Challenge and Appeal process. The other issue is, it is manifestly unfair of course, as it would leave any Ratepayer who fails to meet the deadline, but realises their Rating Valuation is too high later on, stuck with a too high tax bill.

The proposed new system is also looking to impose significant bureaucracy and onus on the Ratepayer. Ratepayers would need to provide information to the Valuation Office as changes occur to their property, or their circumstances change / changes within their leases and also on an annual basis, with fines attached to non-compliance. Apart from the issue of this being a huge bureaucratic burden, it will be interesting how much resource the Valuation Office will put into ensuring all Ratepayers understand what is expected of them, with this fundamental change. We would question if there is a real need, or benefit, of imposing this additional bureaucracy on the ratepayer and imposing fines.

New reliefs for extensions and other improvements, would of course be welcomed. This sits as a carrot to encourage Ratepayers to comply with their new obligations, in reporting these changes. Currently there are 100s of 1,000s of Ratepayers not being charged for the full extent of their buildings and the Government is clearly looking to try to address this going forward, giving some incentive, to sit alongside the system of fines.

New reliefs for green power generation is something which I think everyone would welcome and is long over due; it makes no sense trying to charge Ratepayers for PV panels and the like, as is currently the case. Assistance to incentivise Ratepayers, including occupiers and developers, to make their properties greener has to be a sensible step forward.

Maughan Mitchell would question if this review delivers what is needed, particularly as it does not address in any way the concerns of those struggling with the level of this tax, including notably the retail sector. Restricting the ability to appeal and placing an additional administrative burden on ratepayers, who without advice are unlikely to even understand what they need to do, can’t be a sensible way forward in our view. More regular revaluations are naturally welcomed, to try to ensure the tax burden businesses face is based on current values, however the shear level of the tax still needs addressing and how to fairly address the impact of online on retail. In our view there is much more that needs doing to make this tax system fair and fit for purpose in the current era.

Maughan Mitchell are specialists in Rent and Business Rates advice. Feel free to contact us for friendly expert advice.