Although the Government have provided further support to businesses in the retail, leisure and hospitality sectors for 2023/24, there are still many businesses that have seen annual rates increases following the national Revaluation.
The Revaluation has produced multiple winners and losers across the Revaluation, however, ratepayers should consider advice, in terms of assessing the levels of value, the impact of transitional relief and what the incentives mean in terms of support and cash limits.
Key Aspects of the new List
- The business rates multiplier (the figure you use to estimate your business rates) was frozen at 49.9 pence for small businesses and 51.2 at the standard rate for the 2023-24 rate year.
- The Government has abolished downwards transitional relief caps. It wants to ensure businesses benefitting from lower revaluation rateable values see decreases as quickly as possible. Upwards transition caps of 5%, 15% and 30% will apply for small, medium and large premises.
- The Chancellor has extended the relief scheme for eligible retail, hospitality and leisure (RHL) businesses and increasing the business rates relief from 50% to 75%.
- Rates relief for ratepayers making improvements to their properties will start in 2024, rather than 2023. This will run until 2028.
What Does it Mean for Ratepayers?
The current support recognises the fundamental issue that business rates are too high. The package of support addresses this with the Transitional Relief scheme and freezing the rates multiplier.
And extending the RHL relief is good news for the sectors covered.
But there are still questions concerning the future economic impact of business rates. The gloomy OBR forecast for the economy makes this an even more pressing issue.
The RHL relief is capped at £110,000 per business, so some larger businesses will still pay full rates.
The delay in introducing improvement relief dilutes the positive impact it should otherwise have. Under the scheme, if you make improvements to a property you occupy, you won’t see an increase in your rates for 12 months – providing the work you intend qualifies for relief.
To benefit from this, you’ll need to consider options of waiting until 2024 to make your improvements, depending on the details of the scheme.
However, the biggest issue affecting ratepayers is still the 2023 Revaluation.
The Revaluation’s Impact on Business Rates
The new Revaluation has introduced significant changes in terms of the Rating List now continuing for just 3 years. This is much shorter than previous Lists, that were 6 years and 7 years in length.
Freezing the rates multiplier has been a promising benefit, until you factor in a potential increases in your rateable value and its long-term impact on your business.
You should investigate the impact of transitional relief on any upwards increases over the life of this List and any scope to appeal and reduce your valuations.
What can you do about it?
The Rating List provides the new rateable values for commercial properties in England and Wales. A different portal is available for Scotland and N. Ireland.
Although the Government have shown further support to businesses in the retail, leisure and hospitality sectors for 2023/24, there are still many businesses facing rates increases.
The Revaluation has displayed multiple winners and losers across the Revaluation, however, ratepayers should consider taking advice, in terms of assessing the levels of value, the impact of transitional relief and what the incentives mean in terms of support and cash limits.
Duty to Notify
There are significant changes anticipated over this List as the government are pushing ahead with the ‘Statutory Requirements to Notify’ as contained in the Non-Domestic Rating Bill No 285 that is currently progressing through parliament. Precise dates for when this will become law are not yet known. It is expected these obligations will be met via online submissions on the Valuation Office Agency portal, although the software is still being developed. Examples of these new obligations are summarised below:-
• Any change to an Occupier or changes to your Property
• Any change in your Rent or Lease information
• Receipts relating to certain trading entities will need to be provided annually
• Annual confirmation that obligations have been met will be required
• Requests by the Valuation Office for any information relating to costs
The more you know about your business rates, the better prepared you’ll be for what comes next.
We can help you understand the implications of changes to your rateable value over the remaining Rating List and what you can do to reduce the burden of rates on your business, as well as any preparation for Duty to Notify..
Contact our team today.