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What are business rates revaluations?
Business rate bills are based upon the rateable value of the property which broadly speaking is its annual rental value.
Rateable values are assessed independently of ministers by the Valuation Office Agency (VOA). At a revaluation the VOA updates the rateable values of business properties to reflect changes in the rental property market.
What does this Bill do?
Between 1990 and 2010 revaluations took place every 5 years. The 2015 revaluation was delayed to 2017 and the next revaluation is due in 2022.
This Bill implements commitments made by the Chancellor of the Exchequer in the Autumn Budget 2017 and the Spring Statement 2018 to bring forward by one year the next revaluation for non-domestic rates in England to 1 April 2021 and to move the cycle of new rating lists thereafter in England from every 5 years to every 3 years.
The Bill also brings forward the next revaluation in Wales to 1 April 2021.
Under the 5 year revaluation cycle the VOA were required to publish draft rateable values no later than 30 September preceding the revaluation.
As a consequence of shortening the length of the rating lists to 3 years, the Bill will also move the latest date of the draft rating list to 31 December preceding the revaluation.
What is the policy hoping to achieve?
The Bill responds to calls from businesses for more frequent revaluations. Following a consultation exercise in 2016 (see below) businesses told us that they want to see revaluations more often than the current 5 year cycle.
More frequent revaluations will ensure that business rates bills are more up-to-date reflecting properties’ current rental values. Moving to 3-yearly revaluations will make the system more responsive to changing economic conditions.
Why is legislation needed?
This timetable for revaluations is set out in primary legislation in sections 41, 52 and 54A of the Local Government Finance Act 1988.
To provide a legal basis for the 2021 revaluation in England and Wales, and 3-yearly revaluations in England, we therefore need to amend these sections.
When will businesses know their new business rates bills?
The government will give ratepayers the information they need to estimate their new 2021 business rates bill as soon as possible and before 31 December 2020.
How can I find out more?
In 2016 the government published a discussion paper on delivering more frequent revaluations. You can read a summary of responses.