ICAEW’s Tax Faculty summarises the key changes contained in the bill.

The Non-Domestic Rating Bill was introduced to the House of Commons on 29 March 2023. It gives effect to conclusions reached in the Business Rates Review completed in 2022. 

The key measures in the bill include: 

Shortening the business rates revaluation cycle 

The business rates revaluation cycle in England would be shortened from five years to three years, leading to an earlier reduction in rates when property values fall. The next property revaluation after the recent 1 April 2023 revaluation will therefore take place on 1 April 2026. 

Transitional relief would no longer be revenue neutral 

The bill commits to changing transitional relief given when business rates change as a result of revaluations, so that it no longer needs to be revenue neutral. This means, for example, that decreases in business rates bills arising as a result of these revaluations will no longer be capped, a move called for by ICAEW in its response to the business rates revaluation consultation. 

New requirements to report changes to VOA 

In support of a more frequent revaluation cycle, new duties will require ratepayers to provide the Valuation Office Agency (VOA) with details of changes to their businesses, improvements carried out on the property or part of the property which is liable for business rates, and changes to rent, lease and other information used for valuation purposes. 

New 100% relief for property improvements 

A new 100% relief for improvements to properties would provide 12 months’ relief from higher bills for occupiers, where eligible improvements to an existing property increased the rateable value. There will also be an exemption for eligible plant and machinery used in onsite renewable energy generation and storage. This includes rooftop solar panels, and battery storage used with renewables and electric vehicle charging points. A 100% relief for eligible low-carbon heat networks that have their own rates bill will also be available. 

New data gateways for information sharing 

New data gateways will enable valuation information, held by valuation officers of the VOA in England and Wales, to be shared with their rating counterparts in Northern Ireland. This will allow them to use data from the VOA to discharge their statutory functions, and in turn provide more accurate valuations to Northern Ireland ratepayers. 

Taxpayer reference number requirements 

The bill includes a one-off duty on ratepayers to provide a taxpayer reference number (such as a self assessment or corporation tax unique taxpayer reference) to HMRC. This would allow the VOA and HMRC to match up business rates and tax information. Matching ratepayers’ property data to their tax data will provide central and local government with a more holistic view of businesses. The availability of better data could facilitate the more targeted design of – and improved compliance with – business rates relief schemes. 

Various administrative improvements 

Administrative improvements relating to the multipliers, the central rating list, completion notices in England, the accounting of business rates retention in England, and the removal of restrictions on local authorities making retrospective awards of discretionary relief in England are included in the bill. 

ICAEW’s Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

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