Government postpones the 2021 business rates revaluation

  • Pen and calculator on a writing pad 

Earlier this month, the Government announced that the 2021 rating revaluation, which was all but complete, is to be postponed. Our Rating expert Andrew Smith explores what the delay might mean for business

The Valuation Office Agency has been working on the 2021 Revaluation for the past three years, with the new draft Rating List due to be delivered to Government later this month but we now don’t know for certain when the new Rating List will start. 

Revaluation allows for the tax burden to be re-distributed by re-aligning rateable values with rental values at the antecedent valuation date (AVD), generally two years before the new assessments come into effect. For the current 2017 Rating List, this date is 1st April 2015. Therefore, ratepayers face the prospect of more pain as their rates into 2022 continue to be based on values from seven years ago.

However, with the previously proposed 2021 list, values were to be based on pre-Covid rents of 1st April 2019. Even with a delay of 12 months this would still leave the same problem, all of which rather leaves the entire rating system in limbo. 

Limited options

In terms of the current-day picture, billing authorities, despite their sympathy towards ratepayers during this period, remain limited in their options to help and have been unwilling to accommodate empty property relief claims while staff have been told to stay away from their offices . Claims based upon prohibition of occupation are unlikely to succeed as they will only apply where occupation is explicitly barred by law.

Retail and leisure properties have already been granted 100% rates relief for the 2020/21 rating year, although this too only covers occupied properties. Where a retail property is unoccupied, the best way of managing the rates liability remains the use of an intermittent occupation strategy, whereby short-term occupation of six weeks or more allows the empty property rates clock to be re-set and a further three-month rate relief period granted.

So far, the Government has been unconvinced by arguments to permit a blanket three-month void allowance from 1st April 2020. Therefore the best option open to ratepayers is to lodge a ‘Check’ against their rateable value through the Valuation Office Agency’s online system, as there will likely be a strong case for many ratepayers to argue for a material change in circumstances for the duration of the lockdown period. 

What does seem clear is that some businesses will benefit from the postponement of the revaluation, while for others it creates another issue to be addressed.

Whatever your situation, we are here to help and offer advice. If you have any questions about rates, please contact me directly