Non-Domestic Rating (Lists) (No.2) Bill: policy factsheet
Published 9 September 2020
Applies to England and Wales
© Crown copyright 2020
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1. What are business rates revaluations?
Business rate bills are based upon the rateable value of the property which broadly speaking is its annual rental value.
Rateable values are assessed independently of ministers by the Valuation Office Agency (VOA). At a revaluation the VOA updates the rateable values of business properties to reflect changes in the rental property market.
2. What does this Bill do?
Between 1990 and 2010 revaluations took place every 5 years. The 2015 revaluation was delayed to 2017 and the next revaluation is due in 2022.
In the Queen’s Speech in December 2019 the government committed to bring forward the next revaluation for non-domestic rates in England by one year to 1 April 2021 based on market values at 1 April 2019. However, to reduce the uncertainty for firms affected by the impacts of coronavirus, the government decided that the revaluation would be postponed.
The date of the next revaluation will now be 1 April 2023 based on rents at a valuation date of 1 April 2021 so that it better reflects the impact of COVID-19. The Bill therefore sets the date of the next revaluation in England at 1 April 2023. The Bill will do the same for Wales.
Under the current system of revaluations, the VOA is required to publish draft rateable values no later than 30 September preceding the revaluation. The Bill will move the latest date of the draft rating list to 31 December preceding the revaluation in both England and Wales.
3. What is the policy hoping to achieve?
The next revaluation was scheduled to take effect from 1 April 2021 but would have been based on rental values at 1 April 2019 and therefore would not have reflected the impact of the coronavirus outbreak.
Introducing these values would have created uncertainty for businesses at a time when they are focused on dealing with the crisis. Now the next revaluation in 2023 will be based on rental values at 1 April 2021 so it will better reflect the impact of COVID-19.
Moving the latest date for the draft rating list will mean that the publication of draft rateable values can be aligned with confirmation of the multiplier (tax rate) and any transitional arrangements, allowing the government to at one time give ratepayers a full view of their new business rates bill.
4. Why is legislation needed?
The timetable for revaluations is set out in primary legislation in sections 41, 52 and 54A of the Local Government Finance Act 1988. To provide a legal basis for the 2023 revaluation in England and Wales, we therefore need to amend these sections.
5. When will businesses know their new business rates bills?
The government will give ratepayers the information they need to estimate their new 2023 business rates bill as soon as possible and before 31 December 2022.