The retail sector are calling on the Chancellor, Rishi Sunak, to withdraw a piece of Government legislation that they say would be “disastrous” for the high street; bringing forward the next Revaluation of business rates for 2.08 million non-domestic properties in England and Wales to 1st April next year.
The Non-Domestic Rating (Lists) Bill was introduced in the House of Lords by the Government on 18th March 2020 – just a day after the Chancellor won universal praise for announcing a £22 billion package of support through grant funding and a business rates ‘holiday’.
But the Bill, if it receives Royal Assent, would allow the Government to set future business rates bills for a minimum of the next 3 financial years by reference to rents that were being paid on 1st April 2019, a full year before the Coronavirus affected the economy.
Retailers argue that there is compelling case that, given the economic impact of the coronavirus and the downward pressure that this will have upon rents being paid – with over 20,000 shops forecasted to pull their shutters for good, the Government should take a step back, leaving the next revaluation as originally planned for 2022.
James Lowman, the Chief Executive of the Association of Convenience Stores, says “with such profound changes in the retail industry and property market, we need to make sure that business rates reflect the present and the future, not the past. By moving back to the original Revaluation timetable, the VOA would have a chance to assimilate these changes into their rating decisions, meaning we end up with a more relevant and fair set of valuations.”
Andrew Goodacre, Chief Executive at the British Independent Retailers Association, agreed saying “the current proposal would be disastrous for all businesses that pay non-domestic rates” adding “we must have the reference point for determining future rates bills at a time post coronavirus so they are an accurate assessment taking into account the full impact once this crisis has passed.”
Alex Probyn, UK President at Altus Group, Britain’s largest ratings advisory, says “a Revaluation in 2022, based upon open market rents in 2021, would provide a complete reset of Rateable Values taking into account the state of the market after the crisis has passed.
“It is far more beneficial economically to tie the new rateable values, under the next revaluation cycle, to the post Covid-19 emerging economic circumstances with physical circumstances a year in advance when matters will have more chance of being back to normal and business confidence has started to return.”