With the current system of five-yearly revaluations of business rates causing many businesses financial hardship, the UK property sector has called on the Government to reform the revaluation periods in favour of an annual approach. Experts believe an overhaul of the rating system including more frequent revaluations would provide vital support to aid the recovery of city centres following the pandemic.
Current 2017 rateable value assessments are based on rental data last collected in 2015. Following this five year “rating list” the next revaluation was due to be in 2022 and based on 2020 rents, however the government decided to delay the revaluation by one year initially and then settled on two years due to the pandemic. The revaluation and new rating list will now begin on the 1st of April 2023 and it will be based on rent and trade data collected from ratepayers nationally in 2021.
The British Property Federation (BPF) have commented, saying they believe a rating reform is “long overdue” because commercial rental values outside of London have dropped by close to 50% in the last 10 years.
Rateable values are largely based on rental estimates, which means annual revaluations could mean that we see a significant decrease in the rates payable for commercial properties and an overall fairer system of business rate calculations.
The BPF have also suggested that as part of any reform, a fairer business rates multiplier should be set. The current business rates multiplier is 0.499 for small businesses and 0.512 for large businesses.
Melanie Leech, Chief Executive of the BPF also says “more frequent revaluations is only one piece to the jigsaw.”, further commenting that on top of more frequent revaluations, the appeal process should be improved, as well as a more transparent look at how valuations are determined.
If you are a landlord or occupier requiring business rates advice or empty property rates advice, CPRA are specialists in all rating matters, including mitigation and appeal work. Feel free to contact our business rates department on 020 7770 8000 or email firstname.lastname@example.org.