Business rates - charged by Local Authorities on commercial properties, subject to permitted reliefs and exemptions - are calculated by multiplying the rateable value of the property (set by the Valuation Office Agency) by a business rate multiplier (set by central government). A revaluation exercise is carried out every few years to reflect changes in the property market. At the same time, the multipliers are reviewed so that the overall business rates bill nationwide only changes in line with inflation. Business rates are paid annually on 1.8 million properties in England alone and the next valuation is due in 2017. The Enterprise Bill, introduced in parliament’s recent Queen’s Speech, aims to improve the business rates system ahead of the 2017 revaluation exercise.
The changes will include reform of the business rates appeals process, including extending the powers of the Valuation Tribunal to consider appeals by ratepayers. Additional provisions will allow for the Valuation Office Agency to share information with Local Authorities to improve the system overall. The Bill builds upon the commitment given by the government in the 2014 Autumn Statement to overhaul the business rates system. A consultation published by HM Treasury in March 2015 (closed on 12 June 2015) and its findings are expected to be reported before the 2016 Budget. The consultation invites comment in order to examine the structure of the current system and consider whether it remains fit for purpose. It will consider how businesses use property; what the UK can learn from other countries about local business taxes; and how the system can be modernised so it better reflects changes in the value of property. DMH Stallard’s Real Estate blog will report further on this in due course.