Business rates seem to be in the news regularly and, following George Osborne's announcement of his proposal to devolve business rates (and revenues) to local government, the system of local government funding is again under scrutiny. In the medium to long term, implementation of this proposal is likely to mean significant changes in the rating system.
In the meantime, it's worth bearing in mind that the system is being reformed and many of these changes will coincide with the 2017 revaluation.
Read on to find out more.
What does a revaluation involve?
- Every non domestic property will be revalued by the Valuation Office Agency with effect from 1 April 2017
- This means they will receive a brand new Rateable Value
- The Rateable Value will broadly be equal to one year’s rent of the property as at 1 April 2015
- The new Rateable Values will be released in draft form in Autumn 2016
- No formal appeals will be available until 1 April 2017. Although, in previous years the Valuation Office Agency have corrected obvious errors in advance of this date
How will this affect the business rates payable?
The Government will set a ‘non domestic multiplier’ that is multiplied by the Rateable Value to give the basic amount of rates payable.
However, large swings in rates charges post-revaluation are often limited by a transitional scheme that limits increases and decreases.
The Government is understood to be considering plans to release a provisional multipier figure in Autumn 2016 as the new Rateable Value figures are released.
What else is changing?
- The Government is concerned that there's an issue with empty rates avoidance (see DCLG consultation documents here) and are committed to introducing measures to tackle empty rates avoidance
- The appeals system will also be reformed
- The method of valuation for some types of property will be changing. This will specifically apply to multi occupied city centre office accommodation.
To discuss any of these changes in detail, please contact Philip Vernon or your usual PwC contact.