Transitional arrangements for the non-domestic rating revaluation 2010 in England
Business rates revaluation takes place every five years and the next revaluation will take effect from 1st April 2010, based on values at 1st April 2008. The Valuation Office Agency (VOA) will notify ratepayers of the new proposed rateable values effective from 1st April 2009, in October.
The Department for Communities and Local Government (DCLG) has published a consultation paper The transitional arrangements for the non-domestic rating revaluation 2010 in England which is concerned with large decreases or large increases in rate liabilities between the current 2005 Rating List and the 2010 Rating List which will be in force on 1st April 2010.
By virtue of the statute, transitional arrangements must apply. The options under consideration in the consultation are:
· Option 1: Annual caps on both increases and reductions over four years with different caps for small and large properties
· Option 2: Annual caps on increases over four years funded by a supplement added to all other rates bills
· Option 3: Annual caps on both increases and reductions over five years with different caps for small and large properties
· Option 4: Annual caps on both increases and reductions over five years funded by a supplement added to all other rate bills
Based on suggestions by stakeholders that the Government should indicate its preferred options, the Government prefers Option 3 because the Government states Option 3 ensures that:
· Funding the cost of the transitional relief is targeted at those who have benefited most from the revaluation.
· No ratepayers would face very large (note: presently undefined) increases in 2014-15.
Although the provisional multiplier (Uniform Business Rates or UBR) for 2010 will not be known until Autumn of 2009, DCLG nevertheless estimates that the small business multiplier for 2010 will be 41.3 pence. The equivalent UBR is presently 48.1 pence, a 14% reduction.
Even though the DCLG cannot yet estimate the national non-domestic multiplier for 2010-11, it anticipates that London could be hit the hardest following the revaluation, with London seeing an average increase of 10%. This averaging in our view hides a far higher increase for offices, most especially in the West End, which we expect will in many cases entirely over-run by the UBR reduction.