Government postpones business rates revaluation because of pandemic

Legislation had been introduced to bring the next revaluation forward by one year from 2022 to 2021, but following the recent economic impacts of the Coronavirus pandemic ministers want to ensure businesses have more certainty during this difficult time.

“We have listened to businesses and their concerns about the timing of the 2021 business rates revaluation and have acted to end that uncertainty by postponing the change,” says Communities Secretary Rt Hon Robert Jenrick MP.

“Now is the time for us to continue to focus on supporting businesses affected by the pandemic, including through our unprecedented package of almost £10bn in business rates relief.”

The Government is currently undertaking a fundamental review of business rates, with the key aims of reducing the overall burden on businesses and improving the current business rates system. It is also looking into more fundamental changes to the business rates system in the medium-to-long term.

The move will be welcome for many businesses in the hospitality sector that have been hit hard by  Coronavirus and will feel the long-term effects of the pandemic for a long time to come.

“This is great news - a revaluation next year, based upon open market rents in April 2019, a year before the pandemic, would have been so painful for UK Businesses in the wake of such hardship, if the new tax demands were assessed from pre-Covid levels,” says Alex Probyn, UK president of expert services at real estate adviser Altus Group.

“It is far more beneficial economically to tie new rateable values under the next revaluation cycle to post Covid-19 levels, where the impact of the economic circumstances are more clear, and when businesses will have had longer to recover.”

According to Altus Group, 354,670 premises including supermarkets, shops, pubs and restaurants are among those who have now benefitted from the business rates holiday, which started on 1 April.