On 1 April 2023 – just six months away - the new rating list will go live.
This 2023 Revaluation list is based on the rental value of your business and will affect your Rateable Value (RV), and the cost of your business rates bill moving forward.
The country has seen a multitude of changes in the last few months; a new prime minister, a new cabinet and a controversial mini-budget or two to name a few. Through all this we are all still awaiting an update from the Government as to how rateable values will be impacted on the next rating list. Up to this point, the Government has kept its cards firmly close to its chest with regards to outlining the key changes that are due to be made on the next business rates list.
There is still a lot to be established and we are no closer to getting to the bottom of what the new list will fully entail.
What we know so far is:
- Your new business rates bill will come into effect on 1 April 2023.
- The antecedent valuation date (AVD) took place on 1 April 2021 in England and Wales and on 1 April 2022 in Scotland. On these dates, the Valuation Office Agency (VOA) valued your business property based on its rental value. It will then use this to calculate your new rateable value which together with the multiplier creates your new business rates bill.
- Your current business rates bill (2017 list) is based on the value of your property on 1 April 2015.
- The current 2017 list has lasted for six years.
- In comparison, the 2023 Rating list will be a short list of three years. During this time your rates payments will be paid based on your new 2023 Rateable Value up until 31 March 2026 (when the next revaluation starts). So, we only have a three year window to try to reduce your Rateable Value before the next list starts on 1 April 2026.
- The draft lists with the revised 2023 rateables will be published in December 2022, although your new business rates won’t come into effect until 1 April 2023.
- The Scottish Appeal system is to change, with the time period for appealing properties after the list commences on 1 April 2023 to be reduced down to four months (finishing on 31 July 2023) giving you less time to appeal if you believe your business rates are incorrect.
What we don’t know yet:
- What is happening with transitional relief? Transitional relief is a scheme whereby a limit or cap is applied to the amount a business rates liability can increase (upward transition) or decrease (downward transition). The big question is whether it will be applied in the next rating list? If it does, then occupiers of all sectors are unlikely to be paying their true rates bill across the whole of the rating list. This will have a large impact on rates payment and will be particularly adverse for large parts of the retail sector, where we estimate, given current levels of inflation, that downward transition could result in retailers paying around £2.68 billion more than they should be in the three years of the list.
- It is not certain if the multiplier (the UBR against which the rateable value of a property is multiplied to give the final rates bill) will increase or decrease and to what level. This currently stands at 51.2p (standard) and 49.9p (small business).
- It has yet to be confirmed whether the current three stage appeal system known as Check, Challenge, Appeal will continue to be used on the next rating list, or whether they will change the appeal structure altogether.
There is still a lot of uncertainty at this stage as to what changes are due to take place in the 2023 revaluation. Therefore, in the midst of this uncertainty, it is more important than ever to make sure you are paying the correct business rates.
About the author
Alastair Dyson joined Colliers as a graduate before qualifing as a chartered surveyor in 2020. He works with companies to assess and manage their rating liabilities.
To contact Alastair, email Alastair.firstname.lastname@example.org