A revaluation of business rates in England will no longer take place in 2021 to help “reduce uncertainty” for firms affected by the impacts of Covid-19.
A revaluation was due to take place in England on 1 April 2021 based on pre-COVID19 rental values as at 1 April 2019. However, the Government announced yesterday that the next revaluation will now take place on 1 April 2023 instead and be based on property values as of 1 April 2021 to better reflect the impact of coronavirus more closely.
The Government still plans to undertake a fundamental review of business rates in England with the main aims of reducing the overall burden on businesses, improving the current system, and considering more fundamental changes in the medium-to-long term. A call for evidence has now been launched, which will provide an opportunity for many key stakeholders to contribute to modernising the current system.
This announcement presently relates to England only, but it is likely that Wales will follow suit. In Scotland, as it stands, the next business rates revaluation is due on 1 April 2022. This will be based on rental values at 1 April 2020 and then moving to 3 yearly revaluations from April 2025, with the tone date being 1 year prior.
Lynsey Russell, Associate at Ryden, comments:
“Regular and more frequent revaluations are vital to ensure the legitimacy of the business rates system and to more fairly redistribute the tax burden. Whilst it will provide some certainty for a further two years, yesterday’s announcement will also be unwelcome news for those in sectors whose rental values have fallen significantly since the last revaluation and who were anticipating rateable value reductions had the 2021 revaluation taken place as planned. Despite the promise of a review to the current business rates system in England, this will come as no consolation to those worst affected by the postponement where the reality for those businesses is now an unforeseen and increased financial pressure during already turbulent times.
“It is imperative that the current health crisis now acts as a catalyst to push through the reform that is clearly needed to ensure it is fairer, more responsive to market conditions and easier for ratepayers to navigate than the current system”.
“Notwithstanding the tone date in Scotland of April 2020 happening during a worldwide pandemic, we hope that the Scottish Government maintains its commitment to pursuing the Barclay Recommendations and completing the next revaluation which is due on 1 April 2022 on time.”
Do not hesitate to contact our Rating team to discuss any of these matters in more depth.