Business Rates 2017 Revaluation and Beyond 27 April 2017 Bob Hancock

Contents What are non-domestic rates? How are rates liabilities calculated? 2017 Rating Revaluation Rights of appeal Secondary appeals Future of non-domestic rates © 2017 Lambert Smith Hampton

What are non-domestic rates? Rates are a tax on the right to occupy non-domestic property Total yield in the UK = c.£27bn Approx 1.8m entries within the rating list Collected by local authorities (billing authorities) Mainly retained by HM Treasury, but from 1 April 2013 partially kept by local authorities From 2020 100% retention by local authorities? © 2017 Lambert Smith Hampton

How are rates liabilities calculated? Calculation: Annual liability = Rateable Value x Uniform Business Rate (UBR) Subject to supplements, reliefs, exemptions etc. Rateable Value Annual rental value Fixed point in time FRI terms Three methods of valuation Uniform Business Rate: Set centrally and increased by RPI each year England = £0.466 (RV below £51,000) Supplements (e.g. small business 1.3p, Crossrail 2p) © 2017 Lambert Smith Hampton

2017 Rating Revaluation Since 1 April 1990 five yearly revaluations (2015 postponed) 1 April 2017 first revaluation for seven years Valuation date (AVD) two years before – 1 April 2015 Undertaken by Valuation Office Agency (VOA) in England and Wales Total increase in rateable value in England = 9.6% Redistribute the tax burden rather than increase the total Balanced by a reduction in UBR © 2017 Lambert Smith Hampton

Rateable Value Change Area Retail Industry Office Other All England 4.8% 4.0% 12.7% 15.9% 9.6% North East -6.5% -0.4% -12.3% 9.5% -0.9% North West -5.4% -3.5% -4.4% 10.7% 0.0% Yorkshire & Humber -1.9% 0.7% -12.4% 7.1% East Midlands 5.6% 3.3% 8.2% 13.4% 7.4% West Midlands 3.4% -6.8% 12.3% 3.2% East -3.6% 2.3% 2.4% 3.7% London 26.8% 15.5% 22.6% 26.1% 23.7% South East 1.2% 6.7% 12.9% 17.8% South West -5.7% 5.4% 13.9%

Rateable Value Change - Marinas Total number of properties = 413 Total RV 2010 list = £19.6m Total RV 2017 list = £22.6m Average change in RV = 15.3% Largest increase = 312% Largest decrease = -50% Total number of increases = 264 Total number of decreases = 124 Total number no change = 25 © 2017 Lambert Smith Hampton

Transitional Arrangements Upwards Caps: Property Size 2017/18 2018/19 2019/20 2020/21 2021/22 Small 5.0% 7.5% 10.0% 15.0% Medium 12.5% 17.5% 20.0% 25.0% Large 42.0% 32.0% 49.0% 16.0% 6.0% Downwards Caps: 30.0% 35.0% 55.0% 4.1% 4.6% 5.9% 5.8% 4.8%

Right of Appeal Any interested party can appeal Professional advice strongly recommended New three stage appeal process: Check, Challenge, Appeal Online portal – registration required If unable to resolve then Valuation Tribunal and Upper Tribunal (Lands Chamber) © 2017 Lambert Smith Hampton

Secondary Appeals Material Changes of Circumstances (must be physical and not economic) Reconfiguration of moorings New competition Change of use eg to domestic Reorganisation of assessments Splits/Mergers Relevant Valuation Tribunal/Upper Tribunal decisions © 2017 Lambert Smith Hampton

The Future of Business Rates Calls for reform Review of business rates system Self assessment Blunting Banding More frequent revaluations Remove transitional scheme © 2017 Lambert Smith Hampton

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