Business Rates Changes from 2021 will be based on 2019 Values
March 2018 – In the Spring Statement the Chancellor announced that the next business rates revaluation, which had been due in 2022, will be brought forward to 2021. This follows the announcement in the Autumn Budget of 2017 when it was revealed that business rates revaluations would take place every three years – rather than five – following the next revaluation.
The Government has confirmed that for the 2021 revaluation the two year gap between the antecedent valuation date (AVD) and the revaluation will remain. This means that your new Rateable Value which will have effect from 1st April 2021 will be based on rental values at 1 April 2019.
For help and advice on any business rates matters please contact us.
Budget November 2017
November 2017 – The main features of the budget:
RPI to CPI – From April 2018, rates will rise in line with the lower Consumer Prices Index (CPI) measure of inflation, not the Retail Prices Index (RPI).
“Staircase Tax” abolished – The chancellor promised a change to the law that would result in higher business rates charges on offices that are spread over several floors.
More Frequent Revaluations – The chancellor announced that revaluations would take place every three years, rather than the “usual” five-year period.
Extension of Pub Relief – The £1,000 per annum relief on business rates for pubs with a Rateable Value below 100,000 will be extended for another year until March 2019.
Business Rates and Revaluation 2017
March 2017 – Business Rates and the Revaluation due to come into effect in a few weeks’ time on 1 April 2017 is high on the political agenda and has been front page news in the past two weeks.
The 2017 Revaluation is upon us. The draft lists are published, as too are the UBR and transitional arrangements. The big talking point however is the new appeal regime – “Check, Challenge and Appeal”. Controversial and unwelcomed, Regulations will govern how Rating Agents and the Valuation Office Agency will engage and on appeals how the Valuation Tribunal will proceed on cases.
Some of UK’s largest employers are united in condemning the changes in business rates. One of the main issue being with the Government proposing the right to dismiss appeals against incorrect valuations that are deemed to be within the bounds of “reasonable professional judgement” or margin of error; an error of possibly 15%.
Given our extensive property expertise throughout the North East we are ideally placed to provide the right advice on how best to deal with the changes and either maximise savings or minimise the increased costs.
If you wish to discuss the new Rate Demand for 2017 Revaluation that you have received please contact Guy Nicholson.
Supreme Court Decision
March 2017 – Supreme Court decision regarding Buildings undergoing works or redevelopment is good news for Ratepayers as it means their rating assessments may be reduced. If you have any queries please do not hesitate to contact Guy Nicholson 07941 685703.
In his budget in March 2016 the Chancellor said that – “Business rates are the fixed cost that weigh down on many small enterprises” and went on to announce changes to Small Business Rate Relief that will apply from April 2017. This applies to England only as Wales and Scotland have their own Small Business Relief or Bonus schemes.
The ‘temporary’ enhanced Small Business Rate Relief Scheme, which has been extended every year since it started in October 2010, will be made ‘permanent’ from 2017.
The new threshold, from April 2017, for small business rate relief will raise from £6,000 to a maximum threshold of £15,000.
The new thresholds (from April 2017) are 12,000 15,000 and 51,000
This means that ratepayers that occupy a property with a Rateable Value below 12,000 (and qualify for small business rate relief) will receive relief of 100%.
Qualifying ratepayers that occupy a property with a Rateable Value between 12,000 and 15,000 will receive a tapered amount of relief based on the Rateable Value.
Ratepayers, whether they’re a small business or not, occupying a property with a Rateable Value between 15,000 and 51,000 will have their liability calculated on the Small Multiplier.
Ratepayers occupying a property with a Rateable Value over 51,000 will have their liability calculated on the Large Multiplier which includes a supplement which is used to fund the Small business Rate Relief Scheme.
The news of increased relief will be welcomed by those that will benefit from it, but the Chancellor made no mention of how the increased relief to some ratepayers will be paid for. This is because the mechanism is already in place. The supplement included in the Large Multiplier funds the scheme. The threshold at which the Large Multiplier will be used is increased from 18,000 to 51,000 therefore, as fewer ratepayers will be paying it, the supplement must increase.
This means that from 2017 ‘Thresholds’ will be very important. If your Rateable Value is just over 12,000 or 15,000 or 51,000 a successful appeal may make a significant difference to the amount you pay.
Business Rates Changes 2020
In his speech to the Conservative conference in October 2015, the Chancellor, George Osborne, announced that by 2020 councils in England will be able to keep 100% of the proceeds from business rates raised in their area. Under the current system councils keep 50% and rest goes to central government.
This will be the biggest change to business rates in 25 years
In addition, the Uniform Business Rate (UBR), which currently applies to the whole of England will be abolished. Councils will be able to set their own “Rate in the Pound” which means that the occupier of a property with a Rateable Value of 50,000 in one area, might not pay the same amount of business rates as the occupier of a property with the same Rateable Value in a different area.
Under the proposal local authorities will be able to charge lower business rates but they won’t be able charge higher business rates (higher than what is not yet clear). The exception to this is where there is a directly elected mayor the authority will be able to increase the rate by up to 2p in the pound to finance infrastructure, but only if businesses vote in favour of the increase.
A lot can happen between now and 2020, and there will still be a rating revaluation in 2017, but whatever happens, business rates will continue to be one of the highest outgoings for any business.