Government Delays Business Rates Revaluation
Delay prevents urgent rebasing of values and reform of the system.
The government has announced that the 2021 revaluation in England will not go ahead.
In a short statement the reason given by Government for the delay is to “help reduce uncertainty for firms affected by the impact of coronavirus”.
Delaying a revaluation is not unprecedented. The 2010 rating list was extended from five to seven years in order to “help reduce uncertainty” for firms following the “Credit Crunch” and early 2010s recession. As then, BNPPRE is of the opinion that the only certainty the delay will provide is that businesses’ rates liability will be subject to inflationary change in the short term: an urgent rebasing of rateable values is required, particularly of properties whose value has diminished.
To date Government has only relieved occupied retail, leisure and hospitality premises (and those closed due to Covid-19) in response to the crisis. Our sources suggest that it is highly unlikely that any further reliefs will be granted. Combined with today’s news this indicates that Government is keen to protect front-line local authority funding. Businesses will have to wait at least a year for a rateable value that reflects contemporaneous trading conditions. As matters stand the next revaluation is scheduled for 1 April 2022, which Scotland is already working to and we assume that Wales will follow suit.
A 2019 parliamentary inquiry into business rates highlighted the much maligned Check Challenge Appeal system and demanded a detailed review into matters. In the circumstances this now looks set to be delayed, as will the Bill that was progressing through parliament to put three yearly revaluations into law, a measure that businesses had demanded.
In our view no reform will take place whilst public finances are under considerable strain.