16th August 2023 - James Burkitt

The Non-Domestic Rating Bill has recently been making its way through both the House of Commons and the House of Lords. The bill is a culmination of various business rates reviews and government consultations and we have outlined the key points for ratepayers to consider:-

More Frequent Revaluations – The last rating revaluation was on 1^st April 2023 and whilst the next one is expected for 1^st April 2026, the bill sets out that more frequent revaluations will likely follow which will allow business rates to follow market values more closely.

New 12-month Improvement Relief – This new relief will come into effect from 1^st April 2024 and will result in any improvements made to your property being discounted from your Rateable Value however will only apply for 1 year.

Greater Transparency – We were promised greater transparency over the evidence that underpins each rating valuation however the new bill only places a requirement on the Valuation Officer to provide information if they consider it reasonable to do so.

Duty to Notify/Annual Return – The new duty to notify and annual provision of information are perhaps the most controversial part of the new bill as they place onerous obligations onto ratepayers but no reciprocal duties have been placed onto the Valuation Office Agency.

Under the proposed new system, each ratepayer in England & Wales (this will include circa 700,000 of ratepayers who currently pay no business rates at all due to being in receipt of business rates reliefs), will be required to complete an annual return confirming that either no changes have occurred at the property or they have provided all relevant information to the VOA.

The ‘Duty to Notify’ will require ratepayers to update the Valuation Office within 60 days of changes to their rent, trading information or anything that could affect their Rateable Value (e.g. an extension to the property or the removal of an air conditioning unit).

For ratepayers who do not comply with the new provisions there will be penalties and furthermore if you provide a false statement, you potentially could be committing a criminal offence.

Material Change of Circumstances – Another controversial clause in the new bill removes the possibility of submitting a Material Change of Circumstance (MCC) appeal as a result of government legislation. The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 effectively outlawed the flurry of Covid-19 related appeals that were submitted during the Covid pandemic. This meant that many businesses that were forced to close could not contend their Rateable Values. If there are future circumstances where the government intervenes then business rates appeals would similarly be quashed. E.g. a change in law around EPC’s could not be considered.

We are yet to see the finer details on how the proposed new changes to business rates will work in practice. However, whilst ratepayers were promised greater transparency and more frequent revaluations, the outcome looks to place more onerous obligations upon ratepayers who currently struggle to navigate through a complex rating system.