The Government must commit to the 2023 Revaluation says John Webber, Head of Business Rates at Colliers International, and not allow the lists to slip any further.
The Government announced in May 2020 that the business rates revaluation in 2021 would be postponed, “to provide greater certainty for firms affected by the impacts of Covid-19” and in October confirmed that the next revaluation will take place in 2023, based on property values as of April 1, 2021. At the time of the delay, there were hopes that property rental values in April 2021 would be more reflective of true market values.
However, given the longevity of the impact of the pandemic and national lockdowns, there are concerns that values in April 2021 have not yet stabilized, which might tempt the government to delay the valuation for yet another year.
This would be a mistake says John Webber, “The revaluation should go ahead, even if the VOA has to complete this in one year (basing on values April 1st 2022), as committed to in Scotland. The VOA should be properly resourced to carry out such a revaluation- and indeed given the government has set in motion plans to strike out the 400,000 appeals going through CCA (the appeals system), this will have freed up the VOA to concentrate on the revaluation. A compromise could be a valuation date of 1 October 2020 giving the VOA a further 18 months.
Webber believes that “Leaving the next revaluation to 2024 would be disastrous.” He says a delay essentially mean another seven-year list, with businesses paying rate bills based on rental levels of 2015 for another three years. This should be avoided at all cost.
“We have already seen a decimation of our high streets through over high business rates, linked to rental values of another age. The current system is massively skewered against the physical high street retail sector who pay £7.625 billion a year or nearly a third of the of the total business rates burden. We need to tackle this imbalance as soon as feasibly possible and another delay would be another kick in the teeth for retail as it tries to recover from the pandemic.”
Colliers believe that shorter revaluation cycles are the way forward. “The current five-year revaluation cycle (and this current cycle at seven years) is just too long. We need to move to regular revaluations or even annual revaluations – so that assessments reflect values at the antecedent valuation date (AVD) more accurately during the life of a list.”
“This would reduce the likely significant shift in liability following a revaluation and provide greater certainty for businesses. Once a regular and short period is established between revaluation cycles then a transitional scheme, which we saw with such disastrous impact over the last three years, will be unnecessary and can be condemned to the dustbin”
“We ask the Government to clarify its policy and confirm the 2023 Revaluation. So far we have not seen the VOA start the latest revaluation which should have been completed on April 1st , so there are rumours we will see more delays. This is concerning. Businesses, particularly in the retail and hospitality sectors more than ever need certainty as what to expect-the only certainty they have at the moment is their current rate liabilities are too high. The silence of the government on this matter has been deafening!”