In the Autumn Statement on Wednesday 3 December, the following key business rates policies affecting the commercial property sector were announced:
• The business rates multiplier for 2015/16 will increase by 2% rather than the normal inflationary increase, which would have been 2.3%
• The Small Business Rates Supplement will increase from 1.1p to 1.3p
• Therefore the provisional business rates multiplier for 2015/16 will be £0.493
• The Small Business Rates Exemption of 100% for occupied properties with rateable value below £6,000 has been extended until 1 April 2016
• The discount of £1,000 for shops, pubs and restaurants with a rateable value below £50,000 will increase to £1,500 for 2015/16
• The existing transitional scheme for properties with a rateable value up to £50,000 has been extended by two years
• Alterations to rateable values can only be backdated for the period between 1 April 2010 and 1 April 2015 where appeals have been lodged before 1 April 2015
How does this affect ratepayers?
These measures may appear to be good news for ratepayers; however the reality is more complicated.
For example when the increase in the Small Business Rates Supplement is taken into account, the multiplier for next year will be higher than it would have been had the full RPI increase been applied and the Small Business Rates Supplement been maintained at its current level.
Backdating of alterations
The proposed changes to the backdating of alterations to rateable values beyond 1 April 2015 severely limits the benefits of successful appeals if not made before that date.
Detailed consideration as to whether appeals should be lodged will therefore be required before next April, although poorly considered appeals that could result in increased values must be avoided.
Full review of rates on the horizon
The government also announced that it will review the future structure of business rates before the 2016 Budget. Whilst a wide scale review of business rates is to be welcomed, more needs to be done to support businesses paying a tax set at the height of the economic boom.
The postponement by the government, in autumn 2012, of the next Revaluation ensures that much needed change cannot be delivered before April 2017.
It would be far more equitable for businesses if the government re-assessed rates on a more frequent basis, and removed the imposition of full rates on empty commercial and industrial properties.