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A flurry of business rates review publications, some of them seemingly designed to give ratepayers indigestion over their Christmas turkey.
As part of the Autumn Statement 2013, the Chancellor announced a Business Rates Administration Review, and at about the same time Department for Communities and Local Government (DCLG) announced a review of the business rates appeals system: “Checking and Challenging Rateable Value”. This latter review has now been subsumed into the Business Rates Administration Review (see our recent news item) and the government has published a summary of the responses received to both these consultations. At the same time HM Treasury and DCLG have published the interim findings of the business rates administration review. The interim findings are accompanied by a paper reviewing what might be the effects of more frequent business rates revaluations.
What do ratepayers really need to know out of all these recent publications? The significant elements are in the interim findings document. This covers four main areas: valuation; appeals; information gathering; and billing and collection.
On valuation, it appears that the government will continue with individual valuations for each property, rather than a banding system such as is used for Council Tax. The frequency of revaluations is undecided with the government seeking further views on more frequent revaluations and on the period of time between the valuation date and the valuations coming into force.
In respect of appeals, the government wants to separate informal “reviews” of valuations from a more formal appeal process, which is a sensible aim as the present system automatically treats all unresolved challenges as appeals, regardless of parties’ wishes. It also seems that the government wishes to see more information from ratepayers who make an appeal, and perhaps to make a charge for appeals. This could be very burdensome for smaller businesses.
Regarding information gathering, the paper seems barely to have got the message that central and local government already know a great deal about ratepayers’ properties, through the planning, building control, licencing and health and safety systems, and really should be making use of that information. Instead there is a suggestion that ratepayers should be required by law to provide information about their properties – yet another administrative burden for businesses.
On billing and collection, the solution is apparently to set up a “billing and collection forum” to consider and advise on best practice in this area – not a very inspiring outcome a year on from the original announcement of the review.
The interim findings paper seeks views by 28 February 2015 on a series of further questions about these four key topics. If all of this has the flavour of a review that is simply kicking the can down the road, then that impression is enhanced by the announcement of a review “of the future structure of business rates”, which will work alongside the administration review. This second review is to report by budget 2016.
But before taxpayers get too excited about the idea of a structural review that might examine properly what would be an economically sensible level of property tax in light of current economic circumstances and of wider tax policy, this second review is to be “fiscally neutral and consistent with the government’s agreed financing of local authorities” which means that the amount of tax raised by business rates and the way it is delivered to local authorities has to be the same after the review as before. It seems the can has a little further to travel yet…
