Every statement from Kwarteng represented a tax cut – individuals, businesses and even property were universally credited.
Yet the Chancellor largely ignored the issue of business rates – despite the significant impact that rising inflation is likely to have on the forthcoming Revaluation, and the amount some businesses will have to pay in business rates from April 2023.
With just a handful of months left until the next Revaluation, we expected the Government might address business rates as part of the mini-budget but were left disappointed.
The Government is yet to make any announcements on the new Rateable Values or what the phasing arrangements for Transitional Relief are likely to be – or, more importantly, what the multiplier is likely to look like.
A company’s business rates are calculated by multiplying the rateable value of their property by the multiplier, so once these two items are known, businesses can start to plan and budget for their forthcoming business rates liability.
With a distinct lack of visibility on how much businesses will need to pay come April 2023, businesses are being left to put their fingers in the air when it comes to budgeting – at a time of already significant financial uncertainty.
Whilst some sectors like retail should see a substantial fall in rateable values, we are expecting industrial, manufacturing and logistics occupiers to experience a significant increase in business rates, owing to the property boom in this sector at the height of the pandemic.
Why is this important?
The valuation of their premises on 1 April 2021 is used to calculate an occupier’s business rates liability for the next rating period, so for occupiers of industrial property which rose in value during the pandemic, this will almost certainly mean a significant increase in business rates.
Add to this the additional burden of Duty to Notify, and businesses are left facing not only a significant hike in business rates, but also an administrative nightmare at what is an already difficult time of recession.
Our business rates team is helping companies to plan for future business rates liability, working with the Valuation Office Agency to regularise their position whilst making the most of any potential business rates reliefs that are available.
If you would like support to understand the potential implications of the Draft Rating List on your liability over the next rating period, contact our team for support with your business rates.