There is hardly a week that goes by without mention in the news about the future of the Business Rates system.
The most frequent questions I am asked about business rates are “what is likely to happen to the system, when will it happen and how will it affect my business?
The government has clearly set out its stall, stating that any changes will not affect the total amount of tax revenue it collects – so a Business Rates system of some kind will continue to exist.
Some current facts:
- 1,816m properties in England are rated and valued separately at each revaluation
- 20% of properties account for 80% of the total rateable value at March 2013
- Circa £21 billion pounds in tax
- Revaluations every 5 years since 1990 until the current extension of the 2010 rating list from 5 to 7 years
The government has published its interim findings report in December 2014 following invitations for the public and businesses to engage with it after the Autumn Statement of 2013 and the 2014 budget. Further consultations will be carried out until the final findings will be announced in the 2016 Budget.
Amongst the aspects being considered for change is the impact any change will have on bills:
- The way in which property is valued – unlikely to change
- The frequency of valuations – more frequent revaluations will result in less certainty over bills leading to instability
- Appeals – a more efficient way of resolving them, possibly involving an informal review of the valuation
What are our views at Stratton Creber Commercial?
The current appeal system is not flexible and quick enough. The majority of appeals we make on behalf of clients take between 1 and 3 years to resolve. This puts financial pressure on the ratepayer, and in some cases by the time the appeal is settled circumstances have changed.
There can be no ideal way of bringing in a new system, but one which involves a maximum time limit and provides for a form of mediation before an appeal goes to Hearing, would be a way of speeding the process up and making it less controversial.
Whilst the government has said that it intends to resolve most appeals by July 2015, there is no sign of this happening in terms of the majority of appeals we are currently working on for our clients.
We welcome changes, but fear that these may be delayed by the outcome of the 2015 General Election.
David Hart FRICS
Director in charge of Rating and specialises in retail warehouse rates appeals