Business rates: the 2017 revaluation

Non-domestic properties in the UK pay business rates to local authorities. Business rate liabilities are based on each property’s assigned ‘rateable value’. This is multiplied by a ‘multiplier’ or ‘poundage’ to arrive at the property’s annual liability. Rateable values are normally assessed on the basis of the annual rental value of a property. They are reassessed, normally at five yearly intervals: this is known as a ‘revaluation’.

The most recent revaluation of non-domestic properties in England, Scotland and Wales took effect on 1 April 2017. This note sets out the background to the revaluation and some of the main effects on ratepayers and local authorities; and information on how to appeal against new valuations.

This revaluation was postponed for two years, from 1 April 2015. It is coming into force alongside a number of other changes in rating practice. The combined effect of these may cause some ratepayers’ bills to change significantly:

• The thresholds for small business rate relief in England are rising for the 2017-18 financial year. 100% small business rate relief will be available for qualifying properties with rateable values of £12,000 or less, rising from £6,000. Tapered relief will be available up to £15,000 (previously £12,000).
• There may be substantial changes in valuation practice arising from the 2015 case of Woolway v Mazars. This judgment will in future oblige valuation officers to give separate valuations to properties which are physically separate. For instance, where an office is rented together with a car parking space, valuation officers previously had discretion to assign a single rateable value, reflecting the realities of business. In future they will have to assign a separate rateable value to each ‘part’.
• The Government is introducing, for England only, a new system for appealing against rateable values, called Check, Challenge, Appeal. The intention of this system is to agree on the facts underlying valuations at an early stage in the process, hence removing the need for a large number of formal appeals. This system went live on 1 April 2017.

Details of the functioning of the business rate system can be found in the Library briefing Business rates. Details of recent proposals for reform, changes in the 2016 Budget, and an explanation of the Business Rate Retention Scheme, can be found in the briefing paper Reviewing and reforming business rates.