The government has this morning postponed the next business rates revaluation which was due to introduce new rateable values from 1 April 2021. The Communities Secretary Rt Hon Robert Jenrick MP 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. Now is the time for us to continue to focus on supporting businesses affected by the pandemic, including through our unprecedented package of almost £10 billion in business rates relief”.
The government had committed to more frequent revaluations to ensure that business rates receive bills more accurately reflect up-to-date property rental values and legislation had previously been introduced to bring the planned revaluation forward from 2022 to 2021. This would have been be based on rental levels at 1 April 2019. The original plan to accelerate the revaluation to 2021 was driven by substantial pressure from retailers concerned that the changing face of the high street where rents are now considerably lower than rateable values.
Richard Roberts of RVW said “The postponement will prolong this massive disparity between rent and rateable values in the retail sector and the government will need to seriously consider continuing Expanded Retail Discount beyond the end of the current rate year to help beleaguered retailers. Despite the postponement there has been no comment on when the next revaluation will actually take place. New rating lists are based on rents achieved 2 years before the list comes into effect to allow the Valuation Office time to collect evidence and produce the new figures. A 12 month deferment would move the valuation date to 1/4/20, the height of lockdown, which wouldn’t provide a firm footing for any new list.”
The government has pledged to undertake 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. This postponement potentially provides the time to undertake a more widespread review. RVW will keep clients informed of developments.