CBRE calls on Scottish Government not to delay planned 2022 non-domestic rating revaluation

Global real estate advisor CBRE is urging the Scottish Government not to delay the planned business rates revaluation in 2022 following the UK Government’s announcement to postpone the 2021 revaluation in England.

CBRE is aware that a deferment of the Scottish 2022 Revaluation and/or a change to the valuation tone date (the date that fixes the rental levels that are adopted at revaluation) from 1 April 2020 is being considered by the Scottish Government and the Scottish Assessors Association, and has written a letter to Kate Forbes MSP, Cabinet Secretary for Finance, highlighting why this would be a matter of great concern for both Scottish ratepayers and the wider Scottish business community.

The Non-Domestic Rates (Scotland) Act 2020 received Royal Assent just two months ago, and it is in this Act that the Scottish Government reaffirmed its intention to proceed with the 2022 Revaluation. On this basis the valuation tone date should be 1 April 2020, fixed in accordance with current statutory provisions.

Mike Rose, director in CBRE’s Scottish Rating team, said: “Far from bringing any benefit to businesses at a time when they are under existential threat and significant financial stress from the economic emergency caused by the Covid-19 pandemic, deferment of the next scheduled revaluation would prolong the period before rateable values could be corrected and truly aligned with current or indeed recent rental levels.

“The Barclay Review, which was commissioned by the Scottish Government, recommended increased, not reduced, frequency of revaluations. This recommendation received virtually universal support from business rate stakeholders, including the Scottish Government, which has now enshrined the 2022 Revaluation into law. Any deferment of the next revaluation flies in the face of that commitment.

“Practical circumstances in Scotland and England are very different. The Scottish 2022 Revaluation is more than 22 months away whereas the postponed English 2021 Revaluation was due in under eleven months. In England most 2017, and some 2010 and even 2005, rating list appeals are still outstanding whereas in Scotland appeal resolution is much further advanced, therefore the need to postpone for that reason doesn’t exist.

“In light of these circumstances there is little, if any, justification for deferring the revaluation.”

Mike continued: “Approximately 49,000 Covid-19 related Material Change of Circumstance appeals have been lodged across Scotland in the last two months or so; of these CBRE has submitted several thousand on behalf of its Scottish clients and is ready to engage with the Scottish Assessors Association to resolve these at the earliest opportunity. We are also aware that the effective date of the Covid-19 appeals is likely to be very close to, and in some cases will be, 1 April 2020, i.e. the valuation tone date for the Scottish 2022 Revaluation, therefore by resolving the Covid-19 appeals now, much of the ground work for that revaluation could be done.

“In order to give Scottish ratepayers the certainty they rightly expect based on previous announcements, we ask the Scottish Government to make a clear and unambiguous statement of its intention to proceed as planned with the Scottish 2022 Revaluation and that the valuation tone date will be 1 April 2020, as statute requires.”