This newsletter focuses on this week’s budget and the announcements relating to business rates.
1. Annual Uplifting of the rating multiplier
The chancellor announced that from April 2018 the rating multiplier in England will be uplifted by Consumer Price Index (CPI) inflation, rather than the Retail Price Index (CPI) that has been adopted to date. The CPI measure is normally lower than the RPI measure and so the multiplier for 2018/19 will increase by 3% CPI, rather than 3.9% RPI. I am expecting the 2018/19 multiplier for large businesses in England to be .493 and for small business .48.
2. Pub Relief Extended
The £1000 relief that was provided for pubs with a rateable value of under £100,000 for 2017/18 will be extended to apply in 2018/19.
3. Frequency of Rating Revaluations
The next national revaluation is due on 1st April 2022 and that will go ahead as planned. From then revaluations will take place every 3 years so after April 2022 properties will be revalued in April 2025.
4. Reversing Woolway (VO) v Mazars LLP (The Staircase Tax)
The chancellor has announced that he will seek to reverse the Supreme Court Decision known as Mazars. This case has had the effect of splitting a large number of single assessments into 2 or more separate assessments, often leading to large increases in liability. Splits took place where a ratepayer occupied adjoining properties, often multiple floors of an office block, that did not intercommunicate. The chancellor has said that affected ratepayers will be able to ask the Valuation Office Agency (VOA) to recalculate valuations based on previous practice, backdated as far as April 2010. I await the draft legislation with interest and please let me know if you need further information.
5. Local Authority Rates Retention
From April 2018 local authorities in London will keep 100% of any increase in rateable value, to be pooled and used for projects across the capital.
In summary, a mixed bag of announcements with some relief on rates increases next year, but no sign of a fundamental review of the high level of tax take and the overly complex system.
A quick note on the new appeals system known as Check Challenge Appeal (CCA) for the 2017 rating list. The system still has significant problems and it is difficult to navigate, but the VOA say they are working to improve the system. Before I can appeal for any client I need to be appointed as agent online by the client, I know many of you have done this. For those who haven’t there is a link below. I am of course available to assist.
https://www.tax.service.gov.uk/business-rates-property-linking/start
I am very happy to provide clients with expert professional advice on lease events such as rent reviews, break clauses and lease expiries. Please feel free to contact me for an initial conversation, no charge and no obligation.
I hope this is useful information.
Regards
Phil