A government report published today has found no clear consensus in support of more frequent revaluation cycles for business rates.
Interim findings from the review into business rates administration showed that just over half of respondents would favour more frequent revaluation cycles, believing this would align rateable values more closely to market conditions. This group was largely made up of businesses and their representatives.
However, a “significant minority” of respondents - mostly from the local government sector - said they did not want more frequent revaluations, arguing it would result in decreased certainty and stability for businesses and councils.
Business rates revaluation usually takes place every five years. The last revaluation occured in 2010 and was based on 2008 rents. In 2012, the government postponed the next revaluation by two years to 2017.
The report sought the views of businesses and other stakeholders on ways to improve the administration of business rates, specifically looking at how property is valued and how often, how rates bills are set and collected, and how information about ratepayers and business rates is provided and used.
It contains 217 written responses to a discussion paper, which were received in June. Respondents included the British Independent Retailers Association, British Retail Consortium, property firm CBRE, Asda, John Lewis Partnership and Tesco.
Over 100 responses came from businesses and their representatives, including trade organisations and rating agents, and 100 came from the local government sector. The remaining responses were provided by individuals and think tanks.
The majority of respondents said they would like to retain the current valuation method for business rates, whereby each property receives an individual valuation.
Most of those questioned, including more than half of businesses, felt billing and collection needed significant improvement and that digital options should be explored. Respondents were divided on how the collection of information could be improved.
Business rates campaigner Paul Turner-Mitchell, former owner of Rochdale store 25 Ten Boutique, said “I am staggered the government has concluded that opinion is divided and there is no clear consensus on whether the government should revalue properties more often than it does now.
“The five-year revaluation is unfair, economically inefficient and inhibits investment in those places and sectors of the economy that are struggling. This is because it obliges businesses in areas of relative decline to pay too high business rates for too long and prospering businesses to pay too little.”
Chancellor George Osborne committed to a full structural review of the business rates system to report by Budget 2016 in his Autumn Statement on December 3. This will run alongside the ongoing review of business rates administration.