The government is set to announce a revaluation of business rates which will ensure fairer bills for businesses up and down the country as part of creating an economy that works for everyone.
Local Government Minister Marcus Jones will today (27 September 2016) publish a consultation on the revaluation of business rates which will ensure bills accurately reflect changes in the property market.
New figures published as part of the consultation show that the majority of businesses across the country will be unaffected or better off by the changes, with many looking forward to their bills falling as the system is made fairer across the whole of England.
This is on top of measures which mean that from next April, businesses will benefit from the biggest ever cut in business rates in England – worth £6.7 billion over the next 5 years. As a result, 600,000 businesses across the country will pay no business rates at all.
For the small minority of businesses who face an increase in the bills, any rise will be capped at 5% in the first year for small properties, with a dedicated system of transitional relief worth £3.4 billion to help business owners adjust to the new bills.
Adjustments to the business rate multiplier will mean that overall, receipts from business rates will remain constant in real terms following the revaluation.
Local Government Minister Marcus Jones said:
This government is cutting business rates. Yet local firms also need to be confident that the rates they pay are accurate and fair, no matter where they are in country, and these updates will give them that reassurance.
We are committed to helping all businesses flourish and as we make the system fairer up and down the country, nearly three quarters of companies will see no change, or even a fall, in their bills – including 600,000 who from next April will have their bills cut altogether.
But for the small minority of businesses that do face an increase, we’re putting in place £3.4 billion of transitional relief to provide vital support as they adjust to these fair and impartial changes.
Figures show nearly three-quarters of businesses will see no change to their bills, or a reduction. But for the small minority who will see an increase, Marcus Jones today outlined plans for a system of transitional relief, to bring it in gradually over the next 5 years.
This transitional relief will be worth £3.4 billion, and will mean increases in business rates bills will be phased in over the 5-year period. This relief is on top of the increases in small business rate relief.
London will benefit more than anywhere else in the country from the transitional relief scheme. In total properties in London will benefit from transitional relief worth almost £1 billion over the life of the scheme. Over 140,000 properties in London will benefit from transitional relief of which over 100,000 are small properties.
These measures are on top of wider reforms to business rates, which will mean by 2020, councils will be able to keep 100% of all locally-raised taxes to help fund local services, which will mean a stronger incentive for councils to support and help local firms grow and prosper. While bills will be issued by councils, valuations will be conducted by the independent Valuation Office Agency, to avoid any conflict of interest.
From April 2017, businesses will also benefit from a quicker, more efficient service when checking and challenging their business rates bills. This includes a new online tool to provide information about their property as often as they like, and to track the progress of their check or challenge.
In the last Parliament, the government intentionally changed the timetable of the revaluation from 2015 to 2017 to provide stability for businesses after the financial crash. Government-led efforts to boost the country’s economy and encourage growth have now led to 900,000 more businesses operating now than in 2010, and the government believes it is now the right time to go ahead with updating the figures on which bills are based.
The deadline for the consultation is 26 October 2016 – details can be found on Gov.uk.
Ratepayers will be able to find their individual bills online at the Valuation Office Agency website on 30 September. The changes set out in the consultation are fiscally-neutral, meaning no real increase in the amount of tax raised.
Following the revaluation, the small business multiplier is estimated to fall, from April 2017, by 1.7p to 46.7p; and the standard multiplier is also estimated to fall by 1.7p to 48.0p to ensure business rate receipts remain constant in real terms