Business rates revaluation 1 April 2017
A new consultation document on the revaluation of business rates from 1 April 2017 has been published. The revaluation is necessary to maintain the accuracy of the system and will replace the values from the last revaluation in 2010. The revaluation does not raise additional revenue for the Exchequer as the multiplier applied to the property value is reduced accordingly. It is estimated that nearly three out of every four businesses will see their bills fall or stay the same from next April. However some businesses will still face an increase in the amount of business rates they need to pay.
For businesses facing an increase in the bills, any rise will be capped at 5% for the first year with transitional relief worth £3.4 billion being phased over the next 5 years. Over 140,000 properties in London will benefit from the transitional relief of which over 100,000 are small properties.
Local government Minister Marcus Jones said:
‘This government is cutting business rates. Yet local firms also need to be confident that the rates they pay are accurate and fair, no matter where they are in the country, and these updates will give them that reassurance.’
Business rates are charged on most non-domestic premises, including most commercial properties such as shops, offices, pubs, warehouses and factories. It has already been announced that from April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates, a doubling from the current limit of £6,000. There will be a tapered rate of relief on properties with a rateable value up to £15,000. The threshold for the higher rate will be increased from £18,000 to £51,000.
It is estimated that as a result of these measures 600,000 businesses across the country will pay no business rates at all. From April 2020, taxes for all businesses paying rates will be cut through a switch in the annual indexation of business rates from RPI to CPI.