On 6 May the Government announced its decision to postpone the 2021 Business Rate Revaluation in England and Wales until 2022 as a result of the increased levels of uncertainty facing the market during these unprecedented times, feeling, rightly, that the burden of a new revaluation will only add further to that uncertainty.

There’s been pressure to postpone the 2021 Revaluation due to the assumption that a 2022 Revaluation would be based upon a valuation date of 1 April 2020, as there’s usually a two-year delay between the valuation date and the start of a new Rating List. 

The argument here is that, with this valuation date, rental values will have fallen as a result of Covid-19 and therefore rateable values should be substantially less too. However, the potential flaw with this argument is that with lockdown officially starting in the UK on 23 March 2020, was there any evidence that rental values at 1 April had actually fallen? Would the use of this date provide businesses with any more certainty in the future?

The Valuation Office Agency has been working on the 2021 Revaluation for the past three years, with the new draft Rating List due to be delivered to government later this month. Given the substantial time and money already invested in preparing the next Rating List (estimated at £30 million), and the difficulty in valuing properties as at 1 April this year, the likelihood is that the Government will continue to use this draft Rating List with the 1 April 2019 valuation date. So, in effect, the postponement will only be a deferral of 12 months.

The postponement of the Revaluation is good news for the industrial and logistics sectors, as well as office occupiers around much of the country. Many of these occupiers have been overlooked by the Government’s relief packages during the lockdown period, which are mainly focussed at the retail, leisure and hospitality sectors.  

Only time will tell if further relief in the form of increased rates holidays, deferments or a reduction in rateable values due to a material change of circumstances will be granted to the office, industrial and logistics sectors, but for now the delay to the Rate Revaluation will bring some form of respite. 

While our research was indicating that one of the main winners from a 2021 Revaluation would be the retail sector, with the exception of central London, it remains to be seen how this may now be affected. Retail would mostly have benefited from the Revaluation with lower rateable values, but instead the sector’s rates bills in the 2021/22 rate year will continue to be based on the comparatively buoyant rental market as at 1 April 2015.

Further information

Contact Savills Consultancy - Business Rates