Government consulting further on business rates system for England

You may be aware the Government published last month its final report and conclusions of the Business Rates Review. Following on from that, yesterday the Government released a technical consultation on reforms to the business rates system in England. This consultation, running until 22 February 2022, sets out in more technical detail several of the measures announced at Budget last month. This includes new proposals to support more frequent revaluations. You can see the details at: https://www.gov.uk/government/consultations/business-rates-review-technical-consultation The key headlines in the publication are as follows: More frequent revaluations – ‘Provision of Information’

• To help ensure the sustainability of a more frequent revaluations cycle, businesses will need to provide information relevant to their valuation – such as changes in lease agreements or new improvements to their property – to the VOA.
• Without these reforms, the VOA would not be able to deliver a full revaluations cycle, and clear all appeals against the lists, within a 3-yearly cycle.
• To realise these benefits the government will introduce a duty to notify the VOA of changes to the occupier and property characteristics that affect the assessment of the property for business rates.
• The VOA will share occupier details with billing authorities to support correct and timely business rates bills.
• mandatory provision of rent and lease information, as well as trade information used for valuation.
• There is a desire to move to a ‘real-time’ system which will see the onus shifted onto on the occupier/owner of rateable property to make authorities aware of any changes in circumstances affecting the property.  There are also proposals to impose sanctions and penalties where these requirements are not met by the owner/occupier.

Improvement Relief

• The government has announced a new relief to support investment in property improvements. This will enable businesses to adapt to meet rising demand, make improvements to their premises, and enhance productivity as employees return to the workplace. The measure will be introduced in 2023.
• To receive the improvement relief, ratepayers will need to demonstrate that their property meets 2 conditions:
• the VOA must be satisfied that the improvements meet the definition of qualifying works - the ‘qualifying works’ condition.
• the relevant local billing authority must be satisfied that in the period since the qualifying works commenced the property has remained occupied and that the ratepayer has not changed – the ‘occupation’ condition.

This new relief is similar to the ‘Business Growth Accelerator Relief’ which has been in place in Scotland for many years and aims to encourage investment in property improvements whilst not burdening ratepayers with the relative increase in business rates liability. The intention is that the increase in rateable value resulting from the improvements will have no effect in increasing rates liability for a period of 12 months following the certification. The technical guidance contains much more detail around ‘provision of information’ example customer journeys including leaseholder and freeholder examples. There have been demands for many years for more frequent revaluations more accurately reflecting the economic environment within the life of a rating list.  This is a significant step towards that ambition which will come with some extra demands upon ratepayers to ensure the 3-year revaluation cycle is workable. Another Bill currently making its way through the legislative system is the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill; the latest position there can be found at https://bills.parliament.uk/bills/2861 The Report Stage of the Bill in the House of Lords is scheduled for today (1 Dec) with Royal Assent expected this side of Christmas.