Proposed rating reforms disappointing - Colliers

The government 's proposed reforms on business rates are hitting a brick wall, according to a leading real estate firm.

Although absent from the Queen 's Speech last week, the government has confirmed a 'Non-Domestic Rating Bill ' will form part of the agenda during the next Parliamentary session.

The Bill, which will apply to England and Wales, commits to a move to shorten the revaluation cycle from five years to three from next years and will be accompanied by new duties on ratepayers and 'measures to support compliance ' in what it claims is a bid to improve valuation accuracy and timeliness.

The government will also provide relief on rates for a year where increases to rateable value occur as a result of improvements made to a property.

It says this move is aimed at boosting investment in properties, and a new 100 per cent relief for low-carbon heat networks.

And the Valuation Office Agency will receive new powers to provide ratepayers with information on the calculation of their rateable value.

There will also be a 'tightening ' of appeals against rates based on changing circumstances, with the government relying on the £1.5bn provided in the pandemic support fund to 'future-proof business rates against further shocks.

However, John Webber (pictured), head of business rates at Colliers, said: “Reading these proposed reforms feels like careering into a brick wall. ”

He added: “None of these proposals are new and most were announced in last year 's Budget, where they were criticised then for not being radical enough.

“Obviously a three yearly revaluation is to be welcomed, although we would prefer a move to annual valuations so that rates bills give a more accurate reflection of market values. But the new duties on rate payers will be burdensome, time consuming and costly as we have continually said since they were first announced last year.

“And the rates relief to properties where increases to rateable value occur as a result of improvements made to a property are limited to just one year- so no great radical change there. One year is a tiny time in the life of a property. ”

Webber is also very concerned about the statement concerning 'tightening ' of appeals against rates based on changing circumstances.

He said: “This sounds ominous. Last year the government effectively denied over 400,000 rate payers the chance to appeal their business rates bills on the grounds of Material Change of Circumstance caused by the impact of Covid 19 and the subsequent lockdowns, through striking such appeals out in one fowl swoop and legislating against them.

“This was the biggest MCC in history and it was a disgrace that businesses were denied their right of appeal.

“The £1.5bn Covid-19 Additional Relief Fund (CARF) offered instead has been a joke - not just in terms of the inadequacy in size, but also because thousands of businesses are still waiting to receive support one year on. ”

“It took the Government nine months to pass the necessary legislation relating to the MCC provisions and to set out guidance to Local Authorities for their relief schemes and the scheme is still mired down by delays.

Colliers latest research shows that only 33 per cent of Local Authorities have opened their schemes to applications.

Webber added: “The government must make an announcement about downwards transition soon, particularly as retail businesses are making their business plans now. Without this reassurance the government 's “levelling up agenda ” will be meaningless and the high street unlikely to get back on its feet. ”