The Government has announced that they intend to publish the long-awaited Fundamental Review of Business Rates in the Autumn and whilst the interim review released back in March provided some insight, there is now a further consultation exercise underway regarding the adoption of a three-yearly revaluation cycle.
The modern rating system started back in 1990 with planned five-yearly revaluations and the Valuation Office seemed to cope with this frequency until the market crash led to the deferment of the 2015 revaluation until 2017. Since then, the next revaluation has changed more frequently than Dominic Cummings’ allegiances and we now find ourselves having to wait until 1 April 2023 for the rating list to reflect the massive shift in values that’s occurred since 2015.
The latest proposal is that post-2023, we will move to three-year revaluation cycles which seems like a sensible compromise and realistically achievable, especially with the use of Automated Valuation Models.
The bit that’s missing is that leases under seven years aren’t required to be registered on the Land Registry and there is no comprehensive statutory mechanism by which the data has to be provided without the VOA issuing requests for rental info. The fix to this is potentially coming and all local councils now need to provide regular occupier updates to central government, from which it doesn’t seem like a massive leap to then enable the VO to use that data to identify new occupiers which will provide the necessary fodder for the AVMs to crunch into the new annual rating lists!
Meanwhile the £1.5bn business rates relief fund that’s been promised to those sectors that haven’t yet been able to access any relief is backed up behind the creation of primary legislation. The government published the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill: Policy factsheet on 28 June.
Ignore the part about dissolved companies as it’s just become a convenient vehicle to carry this passenger; the main event is all about putting the primary legislation in place to prevent Covid being used as a Material Change in Circumstances to reduce business rates.
Once that’s been confirmed, we will finally be able to establish the criteria and application process to access this aid.
The obvious problem is that the business rates relief is needed now. Once the legislation has been passed, there will be an inevitable tsunami of applications piled onto an already stretched business rates system that’s still struggling to cope with their current workload and the inefficiencies of home working.