Last week the Government announced that it wouldn’t carry out a Rating re-valuation in 2015 – pushing the date back for two years. Many of my peer group started when the 1973 list had been in place for years – eventually a major revaluation was undertaken in 1990 – since that time there has been a new Rating List every five years.
The last list – effective from April 2010 is based on valuations 2 years previously – i.e. in April 2008. And, in case you have been in a cave. that was pre the property crash. In other words the values are taken at the peak of the market!
And rather than have a re-basing of values – the Government have chosen to leave these sky-high values in place for another two years. The thinking behind the 5 year revaluation was to make the Rating List more reflective of the ‘current’ values.
The Government statement suggests, “we want to prevent unexpected hikes in business rates on local firms over the next five years. Tax stability is vital as business rates are the third biggest outgoing for firms”
The property industry are up in arms about this.
It is nonsense to suggest that this helps business. What actually happens after the revaluation is that the Government adjust the Rate poundage – so that the net effect on their income doesn’t change. So if the total Rateable Value of all properties drops by 10% they simply increase the Rate poundage by 10%.
The lack of valuation helps London but not the provinces. On Bond Street values in the last 5 years have increased by around 50%. I don’t think that this is the case in Nottingham! We have probably seen values drop.
So the provinces are hugely disadvantaged.
And the Government suggesting Tax Stability helps us is just an insult. It’s no comfort if we are paying too much money to start with.