The Government’s decision yesterday to pull the legislation that would have brought about the next Revaluation in 2021 and thereby delay the reset of rate liability for at least one year poses serious questions for ratepayers and businesses will now need to re-calibrate their budgets for 2021-22, with businesses of all sizes set to be put in an even harder position.

Parliament had been expected to nod through the next revaluation at 1 April 2021, based on rental values as at 1 April 2019. COVID19 has put paid to a much anticipated move towards more frequent revaluations and we now expect the next revaluation to take place in 2022, but in all likelihood the same valuation date of 1 April 2019.

This decision has ramifications for the appeals regime and liabilities in 2021-22 and beyond.

Most importantly, if a revaluation now happens in April 2022 with a 2019 valuation date, then the effects of COVID19 are likely to be disregarded and rateable values will not reflect the anticipated lowering of rental values as a result of the decline in productivity we are already beginning to experience.

Many ratepayers are already considering checks and challenges under the 2017 regime where a ‘Material Change’ can be asserted in the wake of the coronavirus epidemic. But if revaluation now takes place in 2022, and because the factors that can be taken into account are largely physical ones, the physical impact of the virus will probably have cleared, whilst the economic fallout could still be very much with us.

The decision to delay was not entirely unexpected, however, and the Valuation Officer now has a decent opportunity to resolve the bulk of current challenges made by ratepayers since 2017 and those that are yet to be lodged.

The deferment of the revaluation will also provide ratepayers with extra time to submit ‘checks’ in order to start the process to review their existing assessments as far back as 1 April 2017. This will be important given the current lockdown and will at least allow ratepayers the breathing space of an extra 12 months to appeal.

With all this in mind, we would encourage government to carefully consider the transitional relief arrangements for 2021/22. Any impact to businesses from a delay in rebasing liability on up-to-date rental values should not be compounded by punitive downwards phasing restrictions.