A lack of information on next year’s business rates revaluation is making it impossible for companies to budget with confidence. The government has not yet properly addressed the issue, leaving little time for businesses to plan for Revaluation Day on 1 April 2023.
Ministers have 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 from April.
With just a few months left until the next revaluation, we expected the government might have addressed business rates by now, but we’re left disappointed. There is a distinct lack of visibility, so firms are left to put their fingers in the air when it comes to budgeting.
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 that may affect 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.
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.
Adam Barnfield, head of business rates, Vail Williams