News
08.03.2017

Spring Budget 2017: Chancellor gives little certainty to ratepayers with Revaluation 2017 just weeks away

Despite providing some relief for the smallest businesses, today’s Budget will give no certainty for ratepayers concerned at plans to restrict their ability to appeal incorrect bills, rating experts said today.

The new system would see businesses unable to reduce their bill if the error is within the bounds of ‘reasonable professional judgement’, often considered to be 10% of the value of a property. This would force some businesses to overpay, even though they can prove their property is overvalued.

Emily Francis, head of rating at BNP Paribas Real Estate, said: “This is ratepayers’ greatest concern, and they will be disappointed that it was not addressed at all by the Chancellor. “With the revaluation coming in to force on 1 April, the new appeals system is still not in place and there is no indication that HMRC’s online portal through which appeals will be made is ready. Businesses will wonder how they are expected to appeal their bills.”

 

Today’s announcements

The Chancellor today announced a package of support including a £1,000 business rate discount for public houses with a rateable value of up to £100,000, support for small businesses losing small business rate relief and a £300m fund for local authorities to support business in their local area.

Emily Francis said: “Today’s announcements will be welcome for the smallest of businesses but offer little respite for the vast majority of ratepayers, and far less relief than those in Scotland have been given by the Scottish Government.

“Although 90% of public houses will be theoretically eligible for today’s relief, the fact that it is subject to state aid rules means only a fraction of operators will benefit. “

This will do virtually nothing to compensate for the restriction of appeals, which will leave the hospitality industry badly out of pocket and overpaying millions without recourse. “Our research shows that over the last seven years, 6,000 hospitality businesses saw their rateable values lowered by up to 10%, leading to a reduced rates liability in excess of £95m. Under the new system proposed by the Government, these appeals could be dismissed with no recourse.”

 

Further reform

The Chancellor also repeated a previous commitment to consult on holding revaluations more frequently, with the consultation to take place before 2022, and said that the tax system would be reviewed to capture more activity in the digital economy.

Emily Francis said: “Business rates are an analogue tax in a digital age although the chancellor made it clear that they are here to stay. His commitment to more consultations before the next revaluation ties in with placing all corporate taxes on the HMRC portal by 2022. This suggests that there may be a plan for business rates to be self-assessed in the future, something that the top civil servants are keen on”.

More frequent revaluations will reduce big swings in rateable value, ensuring businesses liabilities are more in line with prevailing economic conditions.

 

Spring Budget 2017: Chancellor gives little certainty to ratepayers with Revaluation 2017 just weeks away