Despite concerns raised by industry and businesses alike over the potentially damaging impact of business rates increases at an already difficult time for the business community, Revaluation 2023 will still go ahead on 1 April 2023.
From this point, the rateable values (RVs) of all commercial properties in England will be updated based on what the properties were valued at on 1 April 2021.
This is known as the antecedent valuation date, and it is used by the Valuation Office Agency (VOA) alongside a formula called the ‘Multiplier’ to calculate a business’ rating liability.
Whilst the antecedent valuation date ensures that all properties are valued from the same starting point and a move to a three-year revaluation cycle brings rateable values in line with an ever-changing property market, the fact remains that changes to business rates liability over the next rating period, will be significant.
In 2021, some property markets – in particular the industrial market -were booming as a result of the coming together Brexit and the rise in online retail resulting from the pandemic.
As a result, those occupying industrial property will experience a significant hike in business rates over the next rating period – all at a time of recession, rising energy costs and a cost-of-living crisis.
Draft Rating List confirms fears
The publication of the Draft 2023 Rating List in November confirmed what businesses had been fearing, but also threw up some surprises.
Overall, the total rateable value in England has increased by 7.3%. And whilst values in retail property have, predictably, fallen by approximately 10.4%, industrial rateable values are up by over a quarter (25.6%).
Perhaps the most surprising, however, is the fact that office rateable values have risen by 12.25%.
To counter the overall rise in rateable value, a support package was announced by the Chancellor for businesses at the 2023 Revaluation. But does it go far enough?