On 1st April 2023, the 2023 Rating List officially came into effect. At this point the draft new rating assessments that were initially published in November, some of which will have subsequently been modified, became live. In addition, last week, just before we entered this revaluation, the Government introduced the new Non-Domestic Rating Bill.
In this update, we discuss the Government’s new Non-Domestic Rating Bill and its proposed changes to the rating system, as well as the current consultation on transparency. We also provide information on the rate of interest for rate refunds resulting from rating list amendments.
Revaluation 2023
The 2023 Rating List assessments can now be formally challenged via the Check Challenge Appeal (CCA) process, which currently remains unchanged for ratepayers in England. For the first time properties in Wales will also now need to be challenged via CCA. For ratepayers in Scotland, the deadline for any appeals is 31st July 2023, a far stricter deadline than in England and Wales. For support with your reviews and appeals, contact your Gerald Eve advisor or email us and one of our sector specialists will be in touch.
New Non-Domestic Rating Bill
In our Spring Budget update, we covered the various publications that were delivered alongside the budget which included confirmation of the next steps that the Government believes are required to deliver the reforms to the rating system.
As anticipated, the Government has now published the Non-Domestic Rating Bill intended to make the legislative changes required to enable it to deliver these reforms. It received its first reading in the House of Commons on 29th March 2023. The Second Reading, at which the Bill is first debated in Parliament, is scheduled for 24 April 2023.
The Department for Levelling Up, Housing and Communities (DLUHC) has summarised what the Government believes the Bill will deliver, as follows:
- More frequent revaluations – Shortening the business rates revaluation cycle in England from five years to three years.
- Administrative reforms – In support of a more frequent revaluation cycle, new duties to require ratepayers to provide the Valuation Office Agency (VOA) with information about themselves, their hereditament (the property or part of the property which is liable for business rates), and their business, underpinned by a new compliance regime.
- Improvement and Heat Network relief – New reliefs for improvements to hereditaments and for heat networks with their own business rates bill.
- New data gateways – To enable the VOA to share certain valuation information with (i) rating officials in Northern Ireland and (ii) ratepayers in England.
- MCCs – Tightening of the scope of Material Change of Circumstances (MCC) provisions in England such that legislation, licensing regimes and guidance from public bodies should not be grounds for a change in rateable value between revaluations.
- Digitalising business rates – A new duty on ratepayers to provide a taxpayer reference number (such as a self-assessment or corporation tax unique taxpayer reference) to HMRC, underpinned by a new compliance regime.
- Administrative improvements – Changes encompassing multipliers, the central rating list, completion notices in England, the accounting of business rates retention in England, and the removal of restrictions on local authorities making retrospective awards of discretionary relief in England.
Many of these changes are steps in the right direction towards more significant reform, but central to the Bill is the change in the way in which information will need to be provided to the VOA and HMRC. Substantial new obligations will be placed on ratepayers under a duty to notify together with a requirement to provide an annual confirmation. The Bill also introduces strict compliance regimes with significant potential penalties and fines for non-compliance.
Have Your Say
In our last update we highlighted a new consultation on proposals for increased VOA transparency.
Read full paper: Consultation on Disclosure Sharing Information on Business Rate Valuations.
While the direction of travel is positive, we have concerns that in its current form these new measures would not provide sufficient evidential information to allow ratepayers to make an informed decision about whether their assessments are reasonable.
The consultation requires responses by 7 June 2023. This is a real opportunity to give feedback on the level of information that would be of genuine assistance to ratepayers, but which stakeholders are comfortable with sharing. We will be submitting a response and would like to represent your views – send us an email.
Other News
At the beginning of March, a short statutory instrument was laid confirming that the valuation date for the next revaluation in 2026 in England and Wales will be 1st April 2024, maintaining the current two-year gap between the antecedent valuation date (AVD) and the start of the new list. We are disappointed that the opportunity to move to a one-year gap has not been taken, but this is not surprising as the Government has maintained that it cannot consider reducing the period until the new duty to notify regime is fully operational.
Finally, a reminder that it has been confirmed that the rate of interest to be applied to rate refunds, resulting from rating list amendments, for the rate year from 1st April 2023 to 31st March 2024 will be 3%. The calculation of interest for a specific refund is complex and something that our rates payment management team (RPMS) can help with.
We will keep you updated as the new Bill makes its progress through the various stages and as always, we are here to discuss any specific issues regarding your properties. We’ll keep you informed of further developments regarding business rates across the UK.
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