BUSINESS RATES

HOW IS THE 2023 REVALUATION IMPACTING INDEPENDENT SCHOOLS?

Andrew Altman, Partner, aaltman@geraldeve.com

Business Rates have risen up the agenda for schools recently - finally some successful appeals against the 2017 Rateable Values in England and Wales – draft figures published for April 2023 –the continued threat to Charitable Relief.

Business Rates, as a property tax, very much remains within the expertise of the Surveying profession – the Rateable Value is a rental valuation within a statutory framework.

The Government are now committed to three yearly revaluations (next one in 2026). Regular revaluations are seen as key to keeping the Rateable Values in line with rental values and therefore maintaining the overall fairness of the system.

Some schools are rented and the Rateable Values are arrived at from the analysis of rental evidence. Most however are valued with reference to rebuilding costs as a starting point. With the increase in costs of about 20% between the valuation dates, it is not surprising that Rateable Values will rise steeply in April.

The Uniform Business Rate (UBR) usually reduces in a revaluation year (the Government aim to keep Business Rates income broadly the same in real terms). However, the UBR will not change this coming April, so a 15% increase in Rateable Value will mean a 15% increase in the April bill in most cases.

As Chartered Surveyors and property tax experts, we will be working through the 2023 figures and liaising with other firms about the scope for a national challenge. However, we are still very much in the thick of working through appeals against the current Rateable Values, with some large savings being achieved backdated to 2017.

The three priorities for schools:1. Find out your 2023 Rateable Value and how this will translate into payments in 2023/2024 onwards.

2. Act fast - the opportunity to appeal against the current (2017) Rateable Values closes on 31 March (the Scottish system is very different – no further 2017 appeals and onerous time limits for appealing against the 2023 figures).

3. Quantify risk – some schools are concerned at the potential risks of Valuation Office omissions being picked up, particularly with Government plans for a new “duty to inform”.

If you do not have a rates advisor and would like information on these issues, then please contact Gerald Eve schools Business Rates expert Andrew Altman. ●