Cushman & Wakefield reacts to the release of draft figures for the 2017 business rates revaluation last week:
Mike Flecknoe, Senior Director and Head of Cushman & Wakefield’s National Rating Team comments:
“Ratepayers must not celebrate too quickly if their draft 2017 Rateable Values are much lower than the current assessment as it is unlikely their rates liability will fall significantly for a number of years. The Government intends to introduce transition in England so any large liability fall is phased in over a several years rather than allowing the ratepayer to benefit immediately. Ratepayers occupying property with a draft rateable value over £100,000 are particularly badly penalised with an expected fall of liability in 2017/18 of only 2.5%, even if their rateable value has dropped by 50% or more.
“Ratepayers will be especially aggrieved when they realise the reason they are not benefitting immediately from lower rateable values is in order to protect predominantly London ratepayers. London is experiencing significantly higher rateable values and consequently transition shields them from large increases in rates liability. However this benefit is paid for by ratepayers whose liability would otherwise have fallen more significantly – a case of the Regions subsidising London?
“Far better if you are a ratepayer in Wales where transition has been abolished. Ratepayers benefit immediately from any fall in rateable value, but of course there is no protection if rates liability should increase significantly after a revaluation.”