Rates revaluation changes: redefining relationships with the Valuation Office

On 1 April 2023, The Valuation Office (VO) is scheduled to present a revaluation of almost every UK non-domestic property. It is designed to align Rateable Values (RV) with changes in the rental market which have taken place over the last few years. RV is based on the rental value of the property in the open market. In England and Wales, this will be the first revaluation since 1 April 2017, which is important because the current RVs are based on rental values from 1 April 2015. Scotland and Northern Ireland were assessed in 2020. Whilst the government believes that now is the right time for a revaluation, the truth is it will redefine the relationships of ratepayers (and their advisors) with the VO. A welcome possibility is that we will move away from the current, almost adversarial, relationship between ratepayers and their advisors on one side and the VOA on the other. All parties hope that both sides will, with effect from April 2023, now be able to work more collaboratively on business rates matters. New regulations will have teeth Some commentators believe that over the three-year duration of the 2023 list, ratepayers will be given the responsibility for confirming or correcting surveys and other data relating to their properties. It is also anticipated that the new regulations will have teeth. For example, if the VO is not notified of any alterations to the property, then it is possible that the ratepayer could be fined for the non-disclosure. This shift from a relatively ‘passive’ attitude to the VO’s property database to ‘active’ affirmations of its accuracy will result in significant additional responsibilities and tasks for ratepayers - at a time when the pressures of running a business have never been greater. A practical solution to this problem is to outsource the task to a business rates specialist, just as most companies outsource financial accounting tasks to bookkeepers and accountants, or legal issues to lawyers. However, the appointed specialist must obviously have a proven business rates capability, as well as the skills, infrastructure and resources to: Undertake a comprehensive annual audit of their property or portfolio Check that the audit results are aligned with the property profiles of their asset/portfolio, held on the VO database Liaise with the VO to resolve any variations Ensure that the discrepancies are addressed to the satisfaction of both parties Ensure that the ratepayer is not liable for any (VO perceived) data errors. There’s still time to act and save It is also important to consider the additional financial impact the forthcoming revaluation will have on ratepayers. The new list is anticipated to result in increases in business rates liabilities for ratepayers in England and Wales next year. Commentators have suggested that the rise will be around 35% on average, compared to current liabilities. It is also anticipated that there will be areas in the north where the rise will be less significant. The good news is that transitional relief currently limits how much an organisation’s rates bill can change each year. However, as a result of the forthcoming revaluation, it is uncertain what relief will be offered, or whether there will be a transitional scheme at all. Given the current economic climate, whilst businesses will not welcome any more news of increasing costs, a prudent precaution would be to appoint a proven business rates specialist to represent their interest and tackle the business rates challenges bearing down on them. The reality is that even though we are six months away from a very significant development in business rates protocols and liabilities, there is still a small window to seek and secure reductions on current business rates liabilities. Acting now will ensure the opportunity to negotiate a reduction, which could be backdated to 1 April 2017, will not be lost.

Rates revaluation changes: redefining relationships with the Valuation Office

David Wagstaff, head of business rates at Matthews and Goodman, looks at the forthcoming changes in business rates and the new responsibilities it will impose on property owners

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