New Legislation Brings Forward Business Rates Revaluations
Business rates in England are usually reassessed every five years and are based on an accurate estimate of a property’s rental value on the open market at a set date. However a new legislation has been introduced to make sure that property revaluations in England are done every three years, instead of every five years.
This change means that the next property revaluation will now take place in 2021 rather than 2022. As it stands, the change has already been confirmed in Wales where the next reevaluation will take place in 2021, in line with England. Similar legislation is likely to be introduced in Scotland, however the next revaluation is expected to take place in 2022.
According to a recent survey by the NHF/NBF, around two thirds of hair salons, beauty salons and barbershops don’t currently pay business rates at all because they qualify for small business rates relief.
Larger salons are more likely to pay business rates, which many feel are becoming an increasing financial burden for them. Almost half of the salon surveyed (42%) reported that their business rates had gone up when they were last revalued in April 2017, while just 13% had seen their rates go down.
Discounts of up to one third are available for businesses with a rateable value of £51,000 or less in 2019-2020 and 2020-21. In the NHF/NBF survey, 41% of salons said they were unaware of this additional relief and many were unsure whether they had to apply for it or whether it would be automatically applied by their local authority.
Regarding the new legislation Hilary Hall, NHF/NBF chief executive, said: “Especially for salons in areas where commercial rents are falling, this is good news. Earlier and more frequent revaluations give salons a better chance of business rates more accurately reflecting their current value on the rental market. Of course, the opposite is true for salons in areas where rents are going up.”