It's the dawn of a new era for business rates, we're in the last nine months of what has been a six-year rating period. Many people have been calling for an overhaul of the system for quite some time, but now the government's "final review" of the 2023 system has been wrapped up, have those calls been listened to?
One thing we do know is that business rates are here to stay. Bringing in roughly £25 Billion per annum is just too large a revenue for the government to pass down. Because of this, it doesn't look like we're going to see a complete redefinition of the system, even if that's what we'd hope for. Instead, the proposed amendments will change how the ratepayer interacts with their business rates, as well as introduce new forms of relief that the ratepayer might be liable for.
Here we'll look at those changes that you can expect in the new rating period, and how they'll affect business rates owners.
Green Energy Relief
Let's get the best bit out there first, we're getting a new form of business rates relief based on your renewable credentials. We've got more detailed info on this here.
While the scheme is still very much in its infancy, from the 1st of April 2022, business owners could be completely exempt from paying the business rates on low-carbon heat networks with their own rates bills.
Also, if business owners use onsite plant and machinery for green energy generation and storage, they could receive 100% relief on their business rates for the whole site!
A new three-year rating period.
The idea here is that shortening the rating period from five years to three will create greater transparency between ratepayer and the VOA when it comes to how business rates are calculated.
It also allows business rates bills to be more dynamic, and quicker to respond to economic changes that may influence your rateable value.
However, it's worth pointing out that ratepayers always could challenge their business rates bill, whenever they want during the rateable period. We're always looking for external factors that could affect our clients' business rates bill to keep costs down. The length of the rateable period doesn't change this.
A new Duty to notify
So while the VOA has shortened the time they expect to provide information to the ratepayer by two years, they also now expect the ratepayer to provide them with information in real-time.
We've covered this in a previous article in a little more detail, but ratepayers will need to inform the VOA of changes to their property such as building additional rooms, installing features such as lifts or air conditioning units, or adding car parking spaces to their premises.
Ratepayers will also have to report to the VOA annually, regarding their property's business rates liability. This is an additional piece of paperwork
This added frequency of communication between ratepayer content and VOA means that fewer outliers should go unchecked. However, it also increases the administrative burden on the ratepayer. It's more important now than ever to ensure you present your business rates liability in a professional format, to ensure your bill is mitigated to the degree you're entitled to.
A three-month challenge window
The focus for the next rating period certainly points towards tightening discrepancies. But also adds pressure on the business owner if they disagree with the VOA's amendments. There is now just a three-month window to challenge a decision. An exemplary challenge can take a lot of dedicated time to put together, meaning to secure the best chances of a successful challenge, any ratepayer without an agent in place must be prepared to sacrifice a considerable amount of their own time.
This is not to say it's not worth it though, as successful challenges can result in massive savings and at CPA we always recommend challenging your business rates to ensure they're where they should be.
But with the additional levels of administration soon to be implemented in 2023, maybe it's more important than ever, to consult a professional, specialist firm to take care of the whole process for you.