An overview of the changes to the rating system
With the 2023 Rating Revaluation looming on the horizon, it is fair to say the changes being introduced to the business rates system in England from 1 April 2023 will be the most radical in over 30 years. But why?
The most significant change isn’t a shift to 3-yearly Rating Revaluations, from the 5-yearly pattern introduced in 1990; the Government has long accepted the need to reduce the period between revaluations to make assessments more aligned with the rental market.
Rather, it’s the fact that the Revaluation will herald a near wholesale shift in responsibility for the ‘maintenance’ of the Rating List, from the VOA (supported by Billing Authorities) to ratepayers – in short, this is being proposed:
New 2023 Rating List assessments
The new rating assessments will be based on the assumed ‘open-market’ rental value of a property as at 1st April 2021.
As before, the antecedent valuation date (AVD) at which the new Rateable Values are based is set 2 years before the Revaluation. This provides Valuation Officers time to gather rental evidence before compiling the draft Rating List – the draft assessments are scheduled to be published in December 2022, only three months before the list goes live, on 1/4/2023.
The other key component in calculating the rate liability for a property is the multiplier; these figures are usually announced by the Government once the draft Rating List is published and after the total revenue to be raised by this property tax is confirmed for England and Wales.
The best way to prepare for the 2023 Rating Revaluation is to ensure your current assessment(s) and rate liability is as low as it can be.
Formal Check, Challenge, Appeal submissions might be appropriate; potential relief angles are also worth exploring. Successful CCA action can generate backdated savings for up to 6 years; some relief applications can be applied retrospectively.
With system changes being introduced from 1 April 2023, it is important to identify situations where the floor areas and/or description of the property may differ from the information shown in the VO’s Summary Valuation Report (even where an assessment might be undercooked).