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Rating Way Forward: Business Rates’ Fundamental Review

The conclusions of the Fundamental Review of Business Rates (in England) - a review that began nearly two years ago - were published on Budget Day in October. The Final Report reaffirmed the importance of business rates and its continued central role in the tax system. The tax is therefore retained, but will be reformed. The reforms include: 3-year revaluations, which will involve new obligations and responsibilities for ratepayers and their professional advisers and further changes to the appeal system, the introduction of new reliefs - improvement relief and support for investment in green plant and machinery. If you provide rating advice, then you must watch this module. 

Module Duration: 3 hours 20 minutes

Recorded: 17/01/22

Areas covered

How Did We Get Here: What Was Announced in the Budget?

What's happening for ratepayers between now and April 2023

  • Discounts for one year for retail, hospitality and leisure occupiers (along with airport and ground operations)
  • Freezing of the UBR in England, but as yet, uncertain in the home nations
  • Exploration of an online sales tax
  • The VOA is to receive additional funding to invest in upgraded digital capacities, demonstrating that business rates remain a core tax system for the future
  • Include a rates freeze on building improvements to existing properties – what is an existing building? what improvements? – how long? – how much will this provide ratepayers? 
  • “Targeted business rate exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible heat networks, to support the decarbonisation of non-domestic buildings”

A commitment to business rates and their reform (Overview)

  • Transition remains as an adjustment for small and medium sized businesses to help spread increases in business rates from April 2023, but at the continued cost to businesses deserving, hoping or needing reductions

An introduction to the reforms

Reforms on the horizon

A Ratepayer View

The Reforms

More Frequent Revaluations for England

Moving to a 3 year revaluation from 2023: How will we get there; and what this means on ratepayers and their advisers? How do we deal with challenges and appeals from 2026?

Information Provision and Compliance

  • Information about the property and leases, etc., of the property
  • Costs and trade/accounts information
  • Who provides this and how?
  • Annual confirmations
  • Compliance regimes for these provisions

Changes to Appeals (Including MCCs) and Transparency

  • MCCs and what are not MCCs?
  • Changes to CCA - including abolition of Check
  • Improving transparency of the VOA's valuations
  • Access to Challenge and access to Transparency and their interaction with compliance for provision of information 
  • Changes to the appeals process to ensure all appeals are cleared during the life of the rating list

What Does This Mean for Ratepayers and Their Advisors? 

What Changes are Needed to Make the System Work? 

New Reliefs and Other Reforms

Improvement Relief for England

For certain improvement works, from April 2023

  • The aim: to incentive businesses to invest in their premises; and assist businesses to transitions to net zero
  • Qualifying types of improvements
  • Conditions around occupancy 
  • Who will be eligible for relief?
  • How the relief will be administered?
  • How it will interact with other reliefs? 

Investment in Green Plant and Machinery for England

  • The introduction of exemptions for eligible plant and machinery used in non-domestic onsite renewable energy generation and storage, and a 100% relief for eligible low-carbon heat networks that have their own rates bill.

Other Reforms

  • Changes to the Central Rating List
  • Review of discretionary relief

What Does this Mean for Ratepayers and Their Advisors? 

Panel Discussion on The Reforms