Businesses in retail and hospitality have received some welcome news over the last week regarding their business rate liabilities.
With support outlined in the Chancellor’s Autumn Statement, many in the sector will benefit from the 2023 Business Rate Revaluation, which was announced at the same time.
The Chancellor confirmed that the 2023 rating revaluation will go ahead, but he also announced additional support of £13.6 billion to assist business affected with their liability next year.
One of the most significant measures was the announcement by Jeremy Hunt to freeze the Uniform Business Rate (multiplier) at 49.9p, which he claims will save business £9 billion over the next 5 years.
“In fact, the Chancellor announced a raft of measures which should help many businesses across the West,” observes Andrew Wellens, director at strategic property adviser Avison Young in Bristol.
“In abolishing downwards transition, those businesses occupying property where the rateable value has fallen will receive the full benefit from next April, with the Government carrying the £1.6bn burden,” he says.
“The Chancellor has also introduced an improved transitional relief scheme, capping the liability for those facing upward increases in liability, for small, medium and large properties in 2023-4, including where small business rate relief is lost.
“And, he has extended the retail hospitality and leisure business rates relief from 50% to 75% up to £110,000 per business.”
While the Chancellor was making his announcement, the Valuation Office Agency published its draft 2023 rating list allowing ratepayers to see the new rateable value which will determine their rate liability for the next three years.
It was good news for most of the retail and hospitality sector where values have generally fallen.
“Retailers at some of the main shopping centres in Bristol, for example, are set to see reductions in rateable value of 44% which, with the removal of downwards transition, will result in similar reductions in liability,” continues Andrew.
“However, whilst the announcements are generally good news for the retail and hospitality sector it is bad news for the light industrial and logistics sector. Properties in these sectors could see increases in rateable value of more than 50% and whilst the Chancellor has announced transitional scheme capping any increase, ratepayers could still see their liability increase by 30% in 2023.”
Any ratepayer facing a large increase in rateable value next year should take the opportunity to review the existing rateable value for their property, advises Avison Young.
Andrew concludes, “If appropriate we would advise ratepayers facing increases to take professional advice and look into challenging the 2017 figure before the 31 March 2023 deadline, especially as any reduction in this year’s rate liability could also reduce future years’ rate liabilities.”