Property specialists are warning that a lack of information on next year’s business rates revaluation is making it impossible for companies to budget with confidence.
The business rates team at property consultancy Vail Williams has criticised the Government for not yet properly addressing the issue, leaving little time for businesses to plan successfully for Revaluation Day on April 1 2023.
Adam Barnfield, the firm’s new Head of Business Rates, said the Government has largely ignored the issue of business rates – despite the significant impact that rising inflation is likely to have on the forthcoming revaluation and the amount some businesses will have to pay in business rates from April.
“With just a few months left until the next revaluation we expected the Government might have now addressed business rates but we’re left disappointed.
“There is a distinct lack of visibility on how much businesses will need to pay come April, so they are left to put their fingers in the air when it comes to budgeting – at a time of already significant financial uncertainty.”
The next stage in the process is the publication of the Draft Rating List which should be published by the Valuation Office Agency (VOA) in November.
This list outlines what the new draft rateable values (RVs) will be for all commercial properties in England and Wales and is published online alongside two multipliers – a small business multiplier and a standard multiplier.
Business rates are calculated by multiplying the rateable value of the property by the multiplier. Only once these two items are known can businesses start to plan and budget for their forthcoming business rates liability.
Adam, an Associate based in the Birmingham office of Vail Williams, added: “The Government is yet to make any announcements on the new rateable values or what the phasing arrangements for transitional relief are likely to be – or, more importantly, what the multiplier is likely to look like.
“The valuation of premises on 1 April 2021 – at the height of the pandemic – will be used to calculate an occupier’s business rates liability for the next rating period
“While some sectors like retail should see a substantial fall in rateable values, we are expecting industrial, manufacturing and logistics occupiers to experience a significant increase in business rates, owing to the property boom in this sector at the height of the pandemic.
“In the office sector, transactions were scarce which means that the valuation of premises will not be based on a significant amount of market evidence – because there simply wasn’t any.
“Add to all this the additional burden from next April of Duty to Notify, regarding improvements to buildings which may impact valuation, and businesses are left facing not only a significant hike in business rates, but also an administrative nightmare at what is an already difficult time of recession.
“This prospect, together with the coming together of rising energy costs and interest rates, could deliver a financial triple whammy for occupiers of industrial premises from 2023.”
Adam said that once the Draft List has been published businesses should seek professional advice to cross-check for any factual inaccuracies which may have impacted the rateable value of properties.
This would enable them to be regularised with the VOA – both with future business rates liability in mind, as well as exploring the potential for historical overpayments in rates which may have occurred.
The firm has launched a new free resource hub in which business rates experts countdown to Revaluation Day on April 1 2023 with a timeline and a series of advisory articles to support businesses in budgeting for their ratings during the next rating period, as well as to help maximise potential reliefs: https://vailwilliams.com/service/revaluation-2023/
Vail Williams’ full-service property advice includes commercial agency, investment and development advice, building consultancy, property valuation, planning, lease advisory, property asset management, business rates and occupier consultancy.