Business Rates have been making front page news in recent weeks. Andrew Flower of Cushman & Wakefield’s Rating team in Bristol summarises the main issues and what it means for ratepayers in the South West:
“The 1st April 2017 sees the new 2017 Rating List go live with values based on market rental evidence as at April 2015, the current 2010 Rating List is based on evidence from April 2008. Draft list Rateable Values were released on 30 September 2016 with the South West showing an overall 3.8% increase in Rateable Value. However, this disguises many variations regionally for example offices and retail in Plymouth seeing falls of up to 30%, whereas modern office accommodation in central Bristol has seen increases of up to 40%.
Generally speaking the level of movement in the regions is dwarfed by the increase in assessments in London and many ratepayers in the South West will be expecting a fall in rates payable, as the revaluation seeks to redress and balance of the burden reflecting the exceptional rental growth in the capital.
However, a retailer in Plymouth seeing a 30% fall in assessment will be disappointed as the government has introduced caps limiting reductions in liability payable for 2017/18 to 4.1%, or 2.1% after inflation.
Similarly, the government has ‘generously’ sought to limit the impact large increases in assessment to 42% before inflation. Therefore if you are the occupier of a property with a Rateable Value of £100K or more, should you be ‘loser’ at revaluation with your assessment increasing you will pay a maximum of approaching 50% (after inflation) of the resultant increase in rates payable, whilst if you are a ‘winner’ and your assessment decreases you will only see a fraction of the benefit. Arguably there are few winners in the regions as a result of the revaluation as up or down businesses will continue to be squeezed as much as possible.
The position across the Severn is much simpler with no transitional scheme in place meaning if your assessment decreases, so does your annual liability, of course there is no protection should your assessment increase.
Furthermore the government are introducing changes to the appeals process which will make it harder to alter assessments. What began as a proposed wholesale review and revamp of the current business rates system, with consultation from businesses and business rates advisors, has turned out to be nothing more than an opportunity to place even more of the burden on the rate payer in order to challenge their assessment. The proposed Check, Challenge, Appeal system, makes the ratepayer jump through more hoops and will add additional delay to the process. It is a clear attempt by the government to put more hurdles in place making it more difficult for the rate payer to challenge their assessment with the aim to drastically reduce appeal numbers and limit RV loss.
The 2017/18 rate bills will be issued over the coming month, so now is the time to review your rating position. Not only should businesses be taking advice on their new 2017 list Rateable Value, but time is quickly running out to review the current 2010 Rateable Value. The deadline to raise appeals is 31st March and any successful appeal could result in backdated savings in England to 1st April 2015 and to 1st April 2010 in Wales.”
