The long-awaited 2023 business rates revaluation is fast approaching! We expect to see a rebalancing of the tax base which will cost the industrial and logistics sector but benefit the high-street retail sector.
2023 Business Rates Revaluation
Current rateable values are based on an antecedent valuation date of 1 April 2015. The valuation date for the new rating list, which will come into force on 1 April 2023, is 1 April 2021 and rateable values in each sector will therefore reflect the open market rental value as estimated by the Valuation Office Agency (VOA) on that date. This valuation date was, of course, during a period of national lockdown.
A 2023 national revaluation therefore presents the VOA with quite a challenge as the circumstances at the valuation date were unusual, to say the least.
As with previous rating revaluations, we feel that some commercial property owners and occupiers will benefit from the introduction of the 2023 Rating List, whilst others will not. Undoubtedly key sectors such as retail have been impacted at a fundamental level, with Covid-19 accelerating the decline of the traditional high-street retail sector as we knew it. We therefore predict that rateable values in the traditional retail sector, which historically represented over a third of the rateable value pool, will no longer be the largest contributor and will likely fall behind both the office and industrial sectors. We predict office rateable values will remain largely unchanged whilst the industrial and logistics sectors will likely see increases in their rateable values.
It will be very interesting to see how the leisure industry is handled, as accounts for the three years leading up to the valuation date are customarily analysed by the VOA to determine rateable values. This of course means that the 2020 season, during the height of the pandemic, will be a formative year. It remains to be seen what the VOA will do with 2020 trade information, but we suspect that the previous two summer seasons in 2019 and 2018 will be more formative than 2020 in giving a fairer indication of normal levels of trade.
The draft rating list will be published no later than 31 December 2022 and Vickery Holman can help you to review your rateable value before it goes live in April 2023.
To talk to a business rates revaluation expert, contact Vickery Holman here
