Welsh Assembly Minster confirms Wales business rates revaluation pushed back to 2017

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11 March 2013

The 2015 revaluation of business rates in Wales is to be postponed until 2017, Business Minister Edwina Hart has announced. This follows the announcement by Government of its proposed postponement of the 2015 revaluation in England until 2017. The proposals form part of the Growth and Infrastructure Bill currently at report stage in the House of Lords. The Scottish Government has already announced that it is postponing its 2015 Rates Revaluation until 2017. The Northern Ireland Assembly, which cancelled its 2010 revaluation, has announced that it expects to go ahead with a Revaluation in 2015.

The move follows recommendations from the Business Rates Review Task and Finish group set up by the Welsh Assembly Government to review and consider the options on how business rates can be used to support business growth and investment in Wales.

Announcing her decision to Assembly Members Mrs Hart said: “The Business Rates Review Task and Finish Group chaired by Professor Brian Morgan has considered the issues and has concluded that there are technical, economic and practical reasons for Wales to implement the same revaluation date as England. That is 2017.”

The Minster went on to say: “First, and of particular relevance to Professor Morgan’s conclusion are the significant economic issues and close inter-relationships of businesses on both sides of the border. Businesses have consistently told the Task and Finish Group they value certainty and Professor Morgan concluded that instituting a different revaluation date in Wales would not assist a stable business environment.”

Given the impact that high business rates are having on some firms Mrs Hart said she was preparing to consider the potential for a fund to help some sections of the business community that may be particularly affected by the postponement. She said: “This would not be for all businesses affected. That would be unaffordable. I would however consider a targeted approach but this will require more in-depth analysis and costing. I have asked officials to consider this in more detail going forward.”

On the issue of empty property rates for new developments, Mrs Hart said officials are considering the costs and issues of extending the 18 months exemption period announced by the UK Government (for certain buildings) to two years, with three years in Assisted Areas. Officials are also looking at the costs and implementation issues of introducing a scheme that operates in Northern Ireland and Scotland to bring empty properties into use by offering 50% relief.

Finally, Mrs Hart also confirmed that she has asked the Task and Finish Group to examine anomalies in rateable values and the valuation process itself. She said she would consider their findings and use their evidence to press the UK Government to improve the system prior to any future revaluation.

Commenting on the announcement Andrew Hetherton Business Rates Director at GL Hearn said:

“The decision to postpone the Revaluation in 2015 will affect ratepayers in a number of ways but there are two fundamental steps the government needs to take to address the financial burden imposed on all ratepayers. The first is to reduce the very high level of business rates - the cost will rise to over 47% this year, making them the highest level of corporate tax in the UK, and amongst the highest levels of local property tax in the European Union. The second step should be to review the RPI linkage to the business rates tax “take”. This link means that every year, with or without revaluation, the Government takes out of the property sector more tax by way of business rates than any other. Real property represents a declining proportion of the total economy and it makes little sense to keep increasing the tax take from it. Neither of these issues will be addressed by the postponement of the revaluation”

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The decision to postpone the Revaluation in 2015 will affect ratepayers in a number of ways but there are two fundamental steps the government needs to take to address the financial burden imposed on all ratepayers
Andrew Hetherton
Business Rates Director

GL Hearn

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