Foreword

Alex Probyn UK President, Altus Expert Services

I am delighted to welcome you to the inaugural Altus Group Annual Business Rates Review.

The business rates landscape, whilst continually evolving, is currently undergoing a period of rapid change, both from a legislative and practice perspective as well as from the effects of a dynamic property market, the rise of technology, changes in consumer behaviour and, of course, Brexit.

At the Chancellor’s 2018 Spring Statement, Philip Hammond announced that the next business rates Revaluation, a tax which generates 1.4% of GDP, was to be brought forward one year to 2021, with business rates assessments based on a valuation date of 1st April 2019.

One of the unintended consequences of shortening the rating cycle is the Antecedent Valuation Date (AVD) now falls at a time when we are experiencing unpredictable and protracted Brexit negotiations. As such, it is highly likely that the continuing political uncertainties will result in a lack of transactional evidence on which to base the new values, similar to the 2008 financial crash influencing 2010 Rateable Values.

In the event of a drop in occupier demand, consumer confidence and commercial property values it is more than possible that rental evidence pre and post Brexit will be markedly different.

New Rateable Values are likely to be set on evidence in existence prior to the AVD, whilst ratepayers will seek to prove values had already fallen below this level with post AVD deals. The 2021 Revaluation is likely to be both challenging and subjective. The full extent of what will ultimately transpire is unknown, but we do know that the evidential preparation this year is absolutely critical.

Much has been written about the Check Challenge Appeal Regulations (CCA), which have governed rating appeals since the business rates system was overhauled for the 2017 Rating List. Some suggest the new regulations are a deliberate ploy to limit the amount of appeals, and as such may prevent meritorious appeals being heard. While some criticism is indeed warranted, the system can and does function for those willing to work with it. Our own statistics prove that if you find ways to work with CCA, invest in your systems and collate extensive rental data, then success is indeed possible.

Whilst during the period October to December 2018 overall Check numbers declined 0.4% compared with the previous quarter, our own volume of Checks submitted on behalf of our clients rose by 90% whilst, at the same time, maintaining a success rate of 86% - around 20% higher than the national average.

Never has it been more important for business ratepayers to be aware of the opportunities and pitfalls the business rates system presents.

I hope you find our Review of interest.