The government has postponed a business rates revaluation due in 2021, to reduce uncertainty for businesses impacted by the coronavirus pandemic.
Last year legislation was introduced to bring the next revaluation forward by one year, from 2022.
However, revaluation will now be delayed to help firms cope with trading during the crisis. No date has been set yet for the next revaluation.
Communities secretary Robert Jenrick said: “We have listened to businesses and their concerns about the timing of the 2021 business rates revaluation, and have acted to end that uncertainty by postponing the change.”
The government said it is continuing work on a fundamental review of business rates, with the key aims of reducing the overall burden on businesses, improving the current business rates system, and considering more fundamental changes in the medium to long term.
The call for evidence for the review will be published in the coming months.
Alex Probyn, UK president of expert services at Altus Group, which was among the firms leading the call for a postponement, said the deferred date was “great news”.
“A revaluation next year, based upon open market rents in April 2019, a year before the pandemic, would have been so painful for UK businesses in the wake of such hardship, if the new tax demands were assessed from pre-Covid levels,” said Probyn.
“It is far more beneficial economically to tie new rateable values under the next revaluation cycle to post Covid-19 levels, where the impact of the economic circumstances are more clear, and when businesses will have had longer to recover.”
David Jones, managing director of business rates at Avison Young, said: “The announcement does not come as a big surprise but it may simply be ‘kicking the can down the road’.
“The continuation of the 2021 revaluation with a valuation date of 1 April 2019 would have offered some correction in values for the hard pressed retail sector. Notwithstanding the one-year exemption, there is now no reset from April 2021, with the sector having to pay rates based on artificially high values set in April 2015 for at least a further year.
“In the current market turmoil, the government is unlikely to announce any time soon when the next revaluation will be. There are a number of options but the date of the valuation will be key. What is certain is that there will be clear winners and losers from today’s announcement.”
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