2023 business rates revaluation explained
The draft 2023 rating list has now been published, showing that the 2023 business rates revaluation looks set to reduce retail rateable values nationally by 10%, which will be welcomed by owners and occupiers of retail properties. The extent to which occupiers of retail premises will benefit from a decrease in rateable value depends very much on location; some are certainly going to benefit more than others.
Find your current and future rateable value here.
To arrive at the 2023 rateable values, the Valuation Office Agency (VOA) have estimated the rental value of properties on what is known as an antecedent valuation date (AVD). This estimate of the rental value of a property becomes known as the property’s rateable value; a multiplier is then applied to this to generate your annual business rates liability. Your annual liability can increase, depending upon where the multipliers are set.
Even if your rateable value is set to decrease, it is nonetheless important to ensure your business rates liability is based upon correct and fair information. Action can be taken now to ensure you are paying only what you should, now and in the future.
The VOA assess the rental value of retail properties by applying a rate per square metre to the floor area. It is therefore important to ensure the floor area informing your rateable value is correct as, if the VOA are basing their assessment upon too high a floor area, your rateable value could be too high.
It is also possible to inform the VOA you think the actual valuation (price per square metre) of your property is wrong. This needs to be proven with reference to comparable evidence at the AVD.
A professional advisor can tell you if they think it will be possible to have your rateable value reduced and can work with the VOA on your behalf by following the Check, Challenge, Appeal (CCA) process.
As the draft 2023 rating list has now been published, factual errors in your property valuation (such as the floor area) can be corrected prior to the list going live on 1 April 2023. This could lead to a reduction in your current and future rateable value. Appeals to the actual rate per square metre applied in the valuation of the property cannot be submitted until after 1 April 2023, however.
Meanwhile, any errors discovered in relation to rateable values in the current 2017 rating list can also still be appealed using the CCA process, as long as the process is started before 31 March 2023. Any savings can be backdated as far as 1 April 2017, depending on individual circumstances. This is therefore the time to act to ensure no opportunities are missed.
Of course, not all retail occupiers will be enjoying a rateable value reduction; those in particularly popular areas may, in fact, face increases. If this is the case and if you are eligible, transitional relief will limit how much your bill can change as a result of the upcoming revaluation. Furthermore, if you are going to lose small business rates relief as a result of the revaluation, the government has introduced supporting small business relief to ensure your bill will increase by no more than £600 in 2023.
Whilst there is some initial protection from 1 April 2023, the effects of the revaluation will still be felt by owners and occupiers, with the intensity of the increases accelerating in the coming years.
Whether your rateable value is increasing or decreasing, now is an excellent time to have your current and future rateable values checked by a professional advisor, both to secure any potential historic savings and to ensure your future liability is fair.
Jordan Kennedy (jkennedy@vickeryholman.com) is a Senior Surveyor and Head of Business Rates Consultancy at Vickery Holman.