On the surface, the changes proposed in the new Non-Domestic Rates Bill look positive.
The bill states there will be more frequent revaluations, and announces measures to support decarbonisation and investment, including a relief for low-carbon heat networks and the new 12-month improvement relief from April 2024.
This is a move in the right direction – although we would prefer annual revaluations and believe limiting the new relief for only 12 months will not encourage long-term investment. The bill also plans to make law the three-year transitional relief scheme and remove downwards transition. There are also proposals to digitalise rates: again, measures we support.
However, closer inspection brings concerns about the bill, since it represents a complete change in terms of the obligations on the Valuation Office Agency (VOA) – obligations now being put on the ratepayer. The new requirements for the annual provision of information and the ‘duty to notify’, whereby businesses will need to provide updates on rents and lease information as well as trading information – even where there have been no changes – will be cumbersome.
It will mean an additional 700,000 businesses, which currently pay no business rates due to reliefs, will have to send information to the VOA in a bureaucratic exercise that will not result in any increase in the business rates tax-take. It may also put small businesses even further at the mercy of rogue rating surveyors, unless the profession is regulated.
This new regime is backed up with penalties and fines for failure to disclose information properly, which could run into tens of thousands of pounds with imprisonment for false statements. Meanwhile, no similar obligations have been placed on the VOA to produce its assessments quickly, and there is silence on any timetable associated with transparency.
The bill also says nothing about tackling the real issue with business rates: at over 50p in the pound, it is just too high a tax on business. If the government really wants to help businesses, it must reduce the multiplier to levels they can afford – no more than 34p in the pound.
So, we have our doubts and will be continuing our lobbying campaign among MPs as this bill makes its way through parliament.
John Webber is head of business rates at Colliers
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