The government is launching a consultation on increasing the frequency of business rates revaluations in England.
Under proposals unveiled by HM Treasury today (29 June), revaluations for commercial properties would take place every three years, instead of five.
The consultation forms one part of its fundamental review of the business rates system, which is set to be published in autumn this year.
Jesse Norman, financial secretary to the Treasury, said: “As our economy is recovering, we are supporting businesses to build back better.
“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 consultation also proposes removing the “check” stage of the check, challenge and appeal process, with ratepayers paying a new fee to submit a challenge.
In the meantime ratepayers would supply information about their properties on an annual basis to the Valuation Office Agency.
John Webber, head of business rates at Colliers International, welcomed the move to three-yearly valuations, but raised concerns about the other aspects of its proposals.
He highlighted that there were no plans to reduce the two-year gap between the antecedent valuation date (the date on which valuations are based) and the issue of the next list.
“We would favour a one year gap- so that 2023 rates liability is for example based on values in 2022, not 2021,” said Webber. “This would give a fairer reflection on the market.”
Webber also pointed to suggestions that appeals caused by a material change of circumstance will be “a thing consigned to history”.
Webber said: “My worry is the proposed system would increase the bar to appeal against unfair rating assessments, and thus reduce the number of appeals.
“The VOA will have no need to inspect properties – or maintain the list- that responsibility seems to have passed to every corner shop in the country. This reform seems to be less about helping the rate payer and more about benefitting the government and the VOA.”
Melanie Leech, chief executive of the British Property Federation, said: “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fallen by about 30% over the previous decade – and including inflation it’s more like 50% – while rates remain based on outdated rental values from 2015.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.”
The business rates holiday for businesses, which was introduced last year to help firms offset pandemic-led disruption, is set to shrink from 100% relief to 66% from July.
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