The Government has announced that the proposed Business Rates Revaluation in 2021 in England will be postponed, and Colliers understands it will now consider whether to introduce one on 1st April 2022.
According to the Government announcement:” A revaluation of business rates will no longer take place in 2021 to help reduce uncertainty for firms affected by the impacts of coronavirus.
Communities Secretary Rt Hon Robert Jenrick MP said: “Legislation had been introduced to bring the next revaluation forward by one year from 2022 to 2021 but following the recent economic impacts of the coronavirus pandemic ministers want to ensure businesses have more certainty during this difficult time.
“We have listened to businesses and their concerns about the timing of the 2021 business rates revaluation and have acted to end that uncertainty by postponing the change.
Now is the time for us to continue to focus on supporting businesses affected by the pandemic, including through our unprecedented package of almost £10 billion in business rates relief.”
John Webber Head of Business Rates at Colliers International said, “This is a sensible decision and something we have been calling for some time. The potential detrimental impact upon businesses to have a Revaluation during the Covid-19 period, giving uncertainty to their liability, along with the question of the state of the market on 1st April 2021, felt far too risky. We are submitting appeals for the material change caused by Coronavirus which will take up a lot of VOA resource and it seems sensible for the Revaluation to be postponed whilst these are handled.”
He continued, “There is of course a debate about how properties may be valued for a Revaluation in 2022. Given current market conditions, an Antecedent Valuation Date (AVD) of 1st April 2020 would be anyone’s guess as the current market is in flux.
The AVD for the 2021 Revaluation was 1st April 2019, when the market was in a much more stable place; and we would suggest that it would be sensible to keep to that date for a 2022 Revaluation given values then were not tainted by Covid-19 and the VOA has already almost completed all the work on this. It would be an expensive (£30 million exercise) to repeat.
But this would need to be combined with the Government looking closely at how much it plans to raise from Business Rates in 2022 and the sensible approach would be to accept that tax take should be lower – reducing it from the £26 billion currently taken a year to around £20 billion. This would enable a lower the multiplier and businesses would gain from lower tax bills.”
Webber added, “The Government announced a review of Business Rates to take place over the summer. We would call on the Government to continue with this to ensure that when we come out of the COVID -19 effects economically, the business rates system is fit for purpose. The speed with which the Government has acted with its overall economic measures should give businesses hope that it is listening.”