ANNUAL BUSINESS RATES REVIEW MAY 2020
FOREWORD
Alex Probyn BSc, FRICS UK President, Expert Services
January seems a long time ago. In those first days of the New Year we discussed the challenges and opportunities that we would be navigating in 2020. At that time COVID-19 was Coronavirus and it was something that affected other people. For us, 2020 was the year when we would ensure all our remaining clients with incorrect business rates assessments had cases lodged with the Valuation Office Agency. At the start of the year we were waiting for the Government’s Bill, bringing forward the next revaluation period to 2021, to pass into law. This was in effect a formality, but one which continued to cause some uncertainty. We were also anticipating another (!) “fundamental review of business rates” following significant criticism of the system throughout 2019. We have had many reviews over the years and what has been consistent is that nothing ‘fundamental’ changes as a result of them. We
preferred to concentrate on “today’s reality”, so instead of another review, we have been calling for reforms to the existing system that will improve fairness and certainty, while also speeding up the appeals process.
future Rateable Values. This doesn’t remove the need for further reform, but it does create a foundation upon which a fairer system can be built and allows more time for those reforms to be introduced.
Then in March, of course, everything changed. Government put the country into lockdown. Businesses closed and millions of workers began to work from home. Almost overnight, the way the UK uses commercial property changed. Government exempted retail, hospitality and leisure properties from business rates and, using the business rates system provided access to grants to many smaller businesses.
Despite some valid criticism, the Check Challenge Appeal system is workable with the correct approach. However, we had long argued that increased resource must be found before time ran out. As such we were pleased that, at March’s Budget, the Chancellor announced an additional £11.5 million would be invested in the Valuation Office Agency during 2020/21.
Government has done much to help, but the speed of implementation quickly revealed inevitable anomalies and unfairness which Altus Group has worked hard to highlight and correct to the benefit of our clients and the wider business community. There was a bigger problem however: the planned April 2021 Revaluation would have set rates bills for the next three years based on rental values in 2019, before the COVID-19 crisis. So, since March, in conjunction with several leading UK business groups, my team and I worked hard to press the case to Government to withdraw the business rates Bill and defer the Revaluation by a year to April 2022. The fact that the Government has acted upon our advice is great news as it now allows the valuation date to be brought forward to a point in time at which the impact of the lockdown on commercial property values can be taken into account in
The Valuation Office Agency has struggled to meet its targets; being required to do more with less against a backdrop of rising Challenges. I do hope this additional funding, which we pushed so hard for, enables them to quickly address the current backlog. Over the year ahead we will continue to press the Government to make changes to improve the system, in particular reducing the maximum response time at Challenge from 18 months. Our aim has always been to make rates fair for all UK businesses and we believe, with reform to the current system, this aim is totally achievable. UK businesses have endured a very difficult few years with so much uncertainty and need swift support; the Government must step-up further on the promises made to support growth and prosperity especially as businesses navigate their way through the financial crisis caused by the COVID-19 pandemic.
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