Government postpones the business rates revaluation for a further two years

21 07 20 Government postpones the business rates revaluation for a further two years hero

Postponement of the business rates revaluation is set for a further two years, from 2021 until 2023, and has called for evidence for a wider review of the rating system.


“A six-year list is in nobody’s interest and only intensifies the need for urgent business rates reform” says John Webber, Head of Business Rates at Colliers International.

As part of a statement announcing the draft legislation for the new Finance Bill 2020-21, the governmentsaid: "Under current legislation, the next revaluation would take effect on 1 April 2022 based on pre-COVID-19 property values as of 1 April 2019. In May 2020, the Government announced a postponement to provide greater certainty for firms affected by the impacts of COVID-19."

Today the Government has announced that the next revaluation of non-domestic property in England will instead take effect on 1 April 2023 and: “so that it better reflects the impact of COVID-19, it will be based on property values as of 1 April 2021."

John Webber commented: “While we understand why the Government has taken this approach- given the impact of COVID-19 on values- we think there are 3 issues that need to be considered:"

  • The values currently in the rating list should be reduced because of the effect of COVID-19 on the back of tens of thousands of MCC (Material Change of Circumstances) appeals – and the government should thus be addressing these cases as a matter of urgency.
  • We foresee that with a revaluation date of 1 April 2021, we will still be seeing values significantly impacted by COVID-19 and we doubt that the Valuation Office Agency (VOA) will have sufficient evidence or expertise to arrive at correct figures. The lasting effects of COVID-19 will lead to a significant reduction in rental values at the 1 April 2021 valuation date.

    In effect what the Government will therefore potentially be faced with is either a significant reduction in the annual tax take of £26 billion, or, if it wishes to maintain £26 billion of receipts, it will either have to increase the multiplier from the current level of 50p significantly or introduce another calamitous transitional relief scheme.

    This could give the government the opportunity to recognise that the amount taken in business rates is excessive and unsustainable – and to reduce the multiplier accordingly. The likelihood is however that given the state of public finances by 2023 it is unlikely they will be able to afford to do this.
  • The alternative could be that a properly resourced VOA could carry out a revaluation in 12 months and still introduce a new list on 1 April 2022.

    This would be better than such a delayed list. Under today’s proposals, rate bills will still be calculated according to the 2017 list and 2015 values - until 2023 - a six-year list. Such a long list is in nobody’s interest and only intensifies the need for urgent business rates reform.

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Related Experts

John Webber

Head of Rating

Birmingham

I have over 30 years’ experience in the rating industry and lead a 90 plus rating team at Colliers International.  When I took over responsibility for the team in 2005, it consisted of only a dozen people and has now grown into one of the leading rating advisory teams in the country.  I am a member of Colliers International Management Executive as well as sitting on the company’s promotion panel. 

I am regularly called upon by the national media to give my views on a range of business rates issues and I am vocal commentator on the 2017 Revaluation.

I started my career in the Valuation Office Agency in Kidderminster.  I joined Gerald Eve in 2000 where I spent 10 years before moving to Gooch Webster (now Colliers International). I sit on the National Retail Panel of Rating Surveyors Association which provides guidance on how the RSA town committees work with the VOA and valuation matters.  John sits on the RICS Rating Diploma Committee having passed the prestigious qualification in 2014.

Philip Harrison and I founded 'Accurates' in 2007, the Collier's Compliance and Audit team, which although forms an integral part of the Rating Team is now a leading brand in its own right.

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Charlotte Williams

Director of PR & Communications| UK & EMEA

London - West End

As Director of PR & Communications in the UK and EMEA I am responsible for:
• Developing and executing internal and external communications strategy for the UK and EMEA business.
• Developing and implementing tactical communications plans to build the brand and promote key messages across all media - print, broadcast and social
• Advising senior management on communications reputation management and developing a media engagement programme that supports key business lines.
• Media evaluation and reporting objectives, targets and successes across the business.
• Delivering strategic communications programmes for all our M&A activity

Managment:

  • Manage the UK in-house PR teams
  • Provide strategic direction to the PR teams acorss EMEA
  • For a year (2013/2014) I was Acting Head of EMEA Marketing & Communications (maternity leave cover)
  • I am a member of the EMEA Marketing Leadership and Global PR & Social teams
  • I lead the EMEA PR Leadership team
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