With considerable challenges faced by ratepayers across the UK since the outbreak of COVID-19, both Westminster and the Scottish Government have provided various forms of assistance in terms rates relief and grants in an attempt to keep businesses/economy ticking over.
While the overall success of this approach is yet to be determined, the pandemic has brought many additional challenges to the non-domestic rating system/cycle in terms of adhering to legislative timescales.
In England the next revaluation was set to take place with effect from April 2021 with a valuation date (antecedent valuation date) of April 2019, however Westminster announced recently that the revaluation would be postponed to April 2023 with a valuation date of April 2021.
The mechanics of the Scottish non-domestic rating system have been a hot topic for a couple of months now with various consultations and reviews taking place recently. The outcome of these reviews are worth noting:
2017 Revaluation – Appeal Disposal date
The 2017 revaluation was originally set as a 5-year cycle, from 01/04/2017 to 31/03/2022 with all revaluation appeals having to be disposed of by 31/12/2020. In order to comply with the December deadline (disposal date), the schedule of appeals being cited for hearing had become somewhat arduous, a situation which had become amplified by the effects of COVID-19. The pandemic and the subsequent lockdown measures that followed meant that appealed properties that were cited for hearing this year could not be inspected and measured and/or where there was a point of contention, the Assessor was unable to visit the property in order to clarify matters. Furthermore, most Valuation Appeal Committees were unable to meet due to social distancing measures. After consultation between the various interested parties, in August, the Scottish Government agreed to extend the appeal disposal date to 31/12/2021.
2022 Revaluation Postponement
In Scotland, the next revaluation was scheduled to take place with effect from April 2022 with a valuation date (tone date) of April 2020 and was set to be a 3-year cycle as per the recommendations of the 2017 Barclay Review. Again, after recent consultation, the Scottish Government have made the decision to delay the 2022 revaluation by one year to April 2023, which now falls in line with England and Wales; however the Scottish valuation date will now be April 2022 as opposed to England and Wales being April 2021.
Effect on Scottish Ratepayers
The current 2017 revaluation is based on a valuation date of April 2015 and reflects the market conditions and levels of value at that date. With the 2017 revaluation now being extended to reflect a 6-year cycle, current Rateable Values will remain at their current level for an extra year, therefore postponing the resultant effects of current market conditions. Had the next revaluation not been postponed, the valuation date would have been April 2020 which would have been in the midst of the current pandemic and in turn would have reflected a falling economy and therefore falling value levels.
The Scottish Government believes that postponing the revaluation by one year and changing the valuation date from April 2020 to April 2022 will provide sufficient time for the market to stabilise post COVID-19 and therefore facilitate more accurate and sustainable Rateable Values.
Whilst this may be a valid assumption, it remains to be seen at this stage how much the market will have recovered by April 2022. Given that the current Rateable Values, which were established based on a 2015 marketplace, are now set to remain for another 12 months, one can only hope that the Government’s recent assistance, in terms of rates relief, may continue beyond FY 2020/2021.
the decision appears to contradict one of the key recommendations of the Barclay Report to have more frequent revaluations and ensure rating assessments closely follow current market conditions