By Angela Green, Content Executive, H&C News: Government release adjusted rateable values.
The Government has now adjusted the rateable values of all 2.1 million non-domestic properties across all sectors of the economy in England and Wales to reflect changes in the property market.
The new rateable values are based upon an assessment date of 1st April 2021 and will be used to determine the basis of the business rates tax calculation from 1st April 2023 until 31st March 2026.
Rating for pubs is notoriously complex. Unlike other rates assessments which are primarily based on rents, valuations for pubs are based on an assessment of ‘fair maintainable trade’, which is calculated using information drawn from turnover, passing rents, services offered, the local area and other factors.
Despite rateable values falling overall for pubs, experts say the reductions do not go far enough.
Analysis of official Government data by the real estate adviser Altus Group, Britain’s largest ratings advisory, shows that pubs will see their rateable values fall overall by £247.16 million from £1.48 billion to £1.23 billion under the 2023 revaluation down 17%.
Robert Hayton, UK President at Altus Group, says: “whilst pubs are big winners under both the Autumn Statement and 2023 revaluation” he added “at the assessment date pubs were effectively closed and trade had been severely impacted by coronavirus restrictions for over a year. Our view is that the market on the valuation date was far worse than these new values suggest. Many ratepayers, especially those large operators precluded from the relief scheme, will now want to consider challenging their future rateable values.”
Whilst pubs were allowed to reopen for outdoor service in April 2021, the majority had to wait until 17th May, when the Government’s roadmap allowed customers back inside pubs.
Further analysis by Altus Group shows rateable values overall for restaurants will fall 5% down from £1.23 billion to £1.17 billion whilst hotels 4-star and above, including 3-star chain operated hotels, will see their rateable values plummet by almost a third falling from £1.61 billion to £1.11 billion. Hotels under 3 stars will see their rateable values fall 23.5% from £213.48 million to £163.31 million.
At Autumn Statement 2022 the Government announced that it will now make sure that for businesses who see a declining business rates bill because of the revaluation will benefit from the full decrease next April.
The Government is also freezing the business rates multiplier which will keep the small business multiplier and standard multiplier at 49.9p and 51.2p respectively whilst extending and increasing the retail, hospitality and leisure relief scheme from 50% to 75% for 2023/24, up to a cap of £110,000 per business.