Autumn Budget 2021: Business Rates

Following the Autumn Budget and Spending Review presented on October 27th and publication of the Business Rates Review: Final Report, there have been a number of important announcements regarding business rates. Please find our summary below.

Announcements with effect from April 2022

  • Freezing the multiplier in England for 2022 to 2023; 49.9p (small business multiplier) and 51.2p (standard multiplier).
  • The government is providing a new temporary relief for eligible retail, hospitality, and leisure businesses in England. Eligible properties will receive 50% relief up to a cash cap of £110,000 per business. Further details to follow but clients in these industries should note this is far less generous than the current relief.
  • The current Transitional and Supporting Small Business Schemes will continue next year.

Further announcements with effect from 2023 onwards

  • The government will introduce a 100% improvement relief, providing 12 months relief from higher bills for occupiers where eligible improvements to an existing property increase the rateable value.
  • The government will introduce an exemption for eligible plant and machinery used in onsite renewable energy generation and storage, such as rooftop solar panels and battery storage used with renewables and electric vehicle charging points.
  • A 100% relief will also be provided for eligible low-carbon heat networks that have their own rates bill.
  • 3-yearly revaluations from 2023 onwards.

New Responsibilities and Penalties for Ratepayers

  • Longer term, as part of the shift to 3-yearly revaluations, the government is following Scotland’s lead in proposing a major transfer of responsibility for maintaining the rating list from the Valuation Office Agency (VOA) to the ratepayer. A new duty will be phased in between 2023-2026 requiring that ratepayers proactively update the VOA on any changes that may affect their rates, along with annual confirmations.
  • There will be penalties for non-compliance; no details have been published so far but for reference, maximum penalties in Scotland are currently 71% of Rateable Value or £61,000. The plan is for this to remove the need for the current Check stage and even make access to the Challenge stage dependent on compliance.
  • The government is also planning to introduce a 3-month Challenge submission window from 2026 with a statutory end of list deadline for resolution.
  • If the changes take place as planned, they will represent a significant change to the current system requiring far more active ratepayer engagement with huge potential costs for missing reporting/response deadlines.

COVID-19 Appeals

  • As previously reported in March last year, the Government has introduced new legislation by way of the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, that will effectively extinguish the impact of COVID-19 as being a fair and reasonable ground for serving a material change in circumstance appeal (MCC).
  • Although this is disappointing news for ratepayers, the Government has announced that they intend to create a new discretionary fund of £1.5 billon to help businesses considered most in need of further support, who may have fallen outside of the scope of the current relief measures which have benefited predominantly retail, leisure and hospitality businesses.
  • The distribution of the £1.5 billion of additional coronavirus relief is largely dependent on the passing of the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, which is currently in the House of Lords committee stage sitting on the 10th of November. We will update when there is more news on this. Progress on the bill can be found here:

2023 Rating Revaluation

  • The next Rating Revaluation will take effect from 1st April 2023 and will be based on rental values achieved as at 1st April 2021 (a.k.a. the Antecedent Valuation Date or AVD).
  • The Draft Rateable Values are expected to be published by 31st December 2022.

Further Consultations

  • The government has committed to consultations next year on both transitional relief and empty property relief so please be aware of potential changes to these schemes over the next few years.

Please get in contact if you would like to know more

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