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The Chancellor of the Exchequer, Rishi Sunak, recently addressed the government to announce the 2021 Autumn Budget and Spending Review and the government’s final report on the review of business rates has now also been released. Our business rates expert, Daniel Green, has summarised the business rates points within the budget and offers their thoughts on the review of business rates report.

Autumn Budget and Spending Review

The measures outlined in this year’s budget predominately impact those in the retail, hospitality, & leisure sectors.

From April 2020, the threshold for 100% rates relief was increased and has now been extended into 2022/2023 for eligible retail, hospitality and leisure businesses. This will be reduced to 50% from 66%, subject to a £110,000 cash cap per business.

For the second year in succession, there is a freeze in the Uniform Business Rate (UBR) multiplier, cancelling the expected near 3% inflationary increase. The multipliers will remain at 0.499 for small rateable values (less than £51,000) and 0.512 for large rateable values (£51,000 and above).

Business Rates Report

Whilst there were talks to scrap business rates, they raise over £25 billion a year and under the current Government look set to stay for some time longer. Despite this, the government have claimed that changes will be made to the system so that it is fairer and more effective for businesses. Some of the key reforms from the business rates report include:

From 1st April 2023 onwards

• The frequency of rating list revaluations will be 3 yearly
• 12 months’ relief on improvement to property that results in an increase of the rateable value

From the 2023 revaluation

• The ratepayer will have a duty to notify the Valuation Officer of changes to the property and to provide rent & lease information proactively
• The current Check Challenge Appeal process will be streamlined by removing the Check stage entirely
• There will be a 3 month window in which Challenges against value can be submitted
• Only ratepayers & their agents can submit a proposal to alter the rating list, currently the landlord of a tenanted property is also allowed to submit a proposal to alter the rating list

Daniel Green, commented, “The budget was the third important fiscal event of the year following March’s Budget and the October announcement of an upcoming rise in national insurance contributions. Business rates featured in the budget but again the focus was on retail, hospitality, and leisure businesses with little for other sectors or landlords. The long awaited final report on business rates has been released and whilst some may have been hoping for an overhaul of the current regime, it looks instead set to evolve; there is no easy way to replace a tax that raises £25bn a year”.