The 2021 Rating Revaluation will be based upon rental levels prevailing on 1 April 2019. As a result the new Rateable Values should be in line with today’s market rental values. On many properties the new Rateable Values are likely to vary significantly from the current figures reflecting changes in rental values.
The Government will publish the draft 2021 Rateable Values on 30 September next year. Although many Rateable Values will significantly change one aspect which will not change is the income generated from business rates for the Government. At a Rating Revaluation the Uniform Business Rate (UBR) is recalculated so as to bring in the same income for the Government as before the revaluation - this revised figure is then also increased by the rate of inflation. It is this process combined with annual UBR increases linked to inflation which has led to the UBR increasing from 34.8p in 1990 when the Government first set a national UBR to this years figure of 50.4p.
The UBR for 2019/20 is the highest ever and it is the first time that this tax has been set above 50% of a property’s Rateable Value. The criticism at the level of business rates is also at an all time high with the Government having to introduce an increasing number of measures in an attempt to mitigate the impact of the tax on certain sectors. This year has seen the introduction of a two year scheme to cut rates bills by a third on retail properties with Rateable Values of less than £51,000. In total the various rate reliefs granted have reduced the total business rates forecast to be collected this year from £31.4Bn to £26.5Bn. The growing criticism reflects that despite previous Government reviews of business rates these have failed to address the fundamental issue that the level of the tax is now too high.
UBR for 2019/20 is the highest ever and it is the first time that this tax has been set above 50% of a property’s Rateable Value