Government launches Business Rates revaluation consultation
The UK Government has launched a consultation into making business rates revaluations more frequent, in the hope of making the system more streamlined and fair.
The proposals were set out today, 29 June, and if approved, would see revaluations take place every three years - instead of five. The consultation announced is part of the Fundamental Review of Business Rates which will conclude in Autumn 2021.
Financial Secretary to the Treasury Jesse Norman said: "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 Local Government Finance Act 1988 introduced 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.
The government had previously undertaken to move to more frequent revaluations, having introduced legislation to bring forward the next revaluations to 2021 - based on 2019 property values. Due to COVID, and to help reduce uncertainty for firms, this was delayed, with the next revaluation set to take effect in 2023 – based on 2021 values.
The Fundamental Review of Business rates, launched in July 2020, conducted a call for evidence which found more frequent revaluations to be a priority for respondents.
In response, British Retail Consortium CEO Helen Dickinson said: “It is great that government have heeded our call for more frequent revaluations. This should be the first step towards making the business rates system fairer and more reflective of current economic conditions.
“As retail emerges from the pandemic, a return to ‘business rates-as-usual’ could derail the industry’s recovery, with unnecessary shop closures and job losses the result. It is vital that the government builds on this first step on the road to reform and stands by its commitment to reduce the overall rates burden on businesses and ensures there are no further delays to the outcome of the fundamental review.”
British Property Federation CEO Melanie Leech added: “We have long called for the Government to introduce more frequent revaluations. Even before the pandemic, outside of central London, retail rents had fallen by about 30% over the previous decade – and including inflation it’s more like 50% – while rates remain based on outdated rental values from 2015. More frequent revaluations are desperately needed to support high street businesses and a more positive future for our town centres.
“Now the Government must also consider abolishing the system of downwards transitional relief, where a reduction to a rates bill following a revaluation is restricted. If the Government is serious about making business rates fairer, they must accurately reflect true rental values with immediate effect upon revaluation.”