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After much speculation surrounding the delay of the business rate revaluation in England, the UK Government has confirmed that the next revaluation will take place in 2023.
In May, it was announced that the proposed revaluation, which had previously been moved forward from 2022 to 2021, wouldn’t be taking place. The decision was made in an effort to reduce uncertainty for businesses that were impacted by COVID-19.
It has now been confirmed that the next revaluation of non-domestic property in England will take place in April 2023, and will be based on property values as of 1st April 2021 to reflect the impact of the pandemic.
The announcement was made in a statement for the new Finance Bill 2020-21, where the Treasury also launched a Call for Evidence for a wider review of the rating system, saying it was “keen to hear from businesses and business representative organisations, local authorities, ratings agents, others involved in the operation of the system and anyone interested in the business rates or wider tax system”. It’s part of efforts to compile views of how the business rates system currently works, issues that need addressing, changes to be made as well as alternative taxes.
The review also comes as Rishi Sunak has proposed an online tax of 2%, which business owners say should only be targeted at large businesses rather than SMEs that more actively support the local economy.
Revaluations typically take place in the UK every five years, whereby the Valuation Office Agency adjusts the rateable value of business properties to reflect changes in the market. The most recent of these was in England and Wales on 1st April, 2017.
Whilst many experts warned that the postponement means companies will be paying out-of-date business rates bills based on pre-coronavirus valuations, others welcomed the news, particularly given the long-overdue need to review the system overall.
ACS chief executive James Lowman hopes the reform will encourage more businesses to invest: “The rates system still acts as a barrier to investment, with retailers in fear of improving their stores because of the increase in rates bills that follows. We urge the Government to consider all available options as part of the plans to reform the business rates system to help retailers invest.”
UKHospitality chief executive Kate Nicholls, also expressed optimism for change: “Securing a full review of the business rates system has been a priority for UKHospitality and its predecessor trade bodies for years. We identified it as the largest barrier to growth in our sector years ago. We have pushed extremely hard to convince the Government to act on this, so it is great to finally see positive action.
“Kicking back the revaluation by a further year will give businesses some much-needed breathing room and stability. Pushing back should also provide time for reforms to be introduced and a more accurate reflection of property values following this crisis which has clearly had an enormous impact on trade.
“The acknowledgement that the current alcohol duty system needs reforming in order to support the sector is also a positive development. UKHospitality has consistently advocated a new, more dynamic duty system which encourages innovation and consumption of alcohol in the safe and supervised environment of a pub, bar or restaurant. It has the potential to boost business.”
The Call for Evidence will take place in two phases, with views on the multiplier and reliefs sections due by 18th September, and responses on all other sections invited by 31st October. To find out more, click here.
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