Business rates support welcomed but firms urged to double-check property revaluations

Chambers Wales South East, South West and Mid and its partners welcomed the announcement from the Welsh Government before Christmas that all businesses in Wales will benefit from new rates support to help with the effects of rising costs.

Businesses will benefit from the £319m package of non-domestic rates support which was revealed in the Welsh Government’s Draft Budget for 2023-24 by Finance Minister Rebecca Evans MS. The overall package of support for businesses is worth more than £460m over the next two financial years.

The non-domestic rates multiplier has been frozen at the rate of 0.535, ensuring that there will be no inflationary increase for business rates.

The Chamber was among the signatories of an open letter in early December, alongside other business representatives and trade bodies, calling on the Welsh Government to freeze the multiplier rate in the coming financial year to ease pressure on businesses.

Paul Slevin, Executive Chair of Chambers Wales South East, South West and Mid, said: “We welcome the business rates support package announced by the Welsh Government and that our calls for the multiplier to be frozen have been heard and actioned.

“The package as a whole has been designed to support businesses and our economy through the challenges of recession.”

Sectors directly affected by the pandemic such as retail, leisure and hospitality will also receive 75% non-domestic rates relief during 2023-24.

 

Following the UK-wide revaluation of rates which comes into effect on 1 April 2023, transitional relief will be provided to all ratepayers whose liability increases by more than £300 as a result of revaluation.

The Valuation Office Agency’s draft rating list, which gives the assessments that will form the basis of liabilities to business rates for the three year period from 1 April 2023, was published in November.

Now that the Draft Budget has been announced and the government’s position on the multiplier, transitional relief and support is confirmed, Welsh ratepayers will be able to accurately budget for their business rates liability.

Cooke & Arkwright is a Corporate Partner of the Chamber. Andrew West, a Director at the firm, said: “The budget announcements, such as the multiplier being frozen at 0.535 and transitional relief, are as we predicted and are broadly in line with those announced for England by the Chancellor in the Autumn Statement.

“From our analysis of the revaluation, Wales will see a reduction of 10.1% in retail assessments but surprising increases for factories throughout Blaenau Gwent, Caerphilly and Torfaen and increases in office assessments in Blaenau Gwent, Bridgend, Merthyr Tydfil, Vale of Glamorgan and Wrexham.”

This is evidenced in the following sectoral statistical analysis:

  1. Offices

2,565 assessments showed no change between lists.

15,824 assessments will increase.

1,450 office assessments will be reduced.

 

  1. Retail

2,586 assessments unchanged.

11,482 assessments increased.

10,032 assessments reduced.

 

  1. Factories and Warehouses

1,788 assessments unchanged.

19,623 assessments increased.

1,252 assessments reduced.

 

Andrew West said: “The high level changes outlined above are surprising. In particular more shops seeing increases than reductions; and the stark contrast between the very few office assessments which will see a reduction compared with a much larger number of increases. The large number of increases in factory and warehouse assessments was as predicted by us.

“These changes are particularly surprising in the context of the valuation date of April 2021 for the new rating list, during which time the economy was still suffering from the effects of the Coronavirus crisis. It should be noted that these changes are compared with the current 2017 rating list for the whole of Wales.”

The commercial property advisory firm is now undertaking preparatory work to challenge many of these new assessments.

Andrew West added: “We will engage with the Valuation Office Agency from April next year in order to promote reductions and seek justification for any changes. We are confident that many of these assessments can be reduced.”