Alongside the budget the government published its proposals following its review of the business rates system. The Chancellor was clear that business rates bring in a significant revenue stream and that business rates are here to stay.
Consequently, the Chancellor confirmed a raft of changes to the system that should make the tax more responsive to changing real estate markets. They have also taken the opportunity to continue the strategy of offloading the costs of administering the business rates system onto the ratepayer.
The details have yet to be published, however the key changes will be:
- 3 yearly revaluations from 2023.
- AVD’s will remain 2 years prior to the start of each Rate List.
- The introduction of a “Duty to Notify”. The government will demand to be told of relevant matters including:
- changes to the occupation of a property
- changes to the characteristics of properties
- lease and rental information
These duties will be phased in over the course of the 2023 list, with penalties for non-complianceThe introduction of a 3-month window of opportunity to lodge business rates appeals following each revaluation, starting in 2026.
The Check Stage of the appeal process will be abolished in 2026.
- The introduction of further restrictions on the right to lodge Material Change appeals.
- We are also promised a consultation on an Online Sales Tax, which will generate revenue that is to be used to reduce the tax liability on traditional bricks and mortar retailers.
The government has not taken the opportunity to follow the Scots and reduce the period between the Valuation Date and the start of the Rate List to one year. This would improve the responsiveness of the system significantly. Instead, the government state this is an “aspiration”.
The full text of the Business Rates Review is here
If you have any questions or need advice on any business rates matters, please contact Alan Vickery on 020 7489 4831 or alan.vickery@dwdllp.com