Non-Domestic Rating Act 2023

The Non-Domestic Rating Act 2023 has now achieved Royal Assent. This signals significant changes to business rates. Although a number of measures are due to be implemented in the long-term through the introduction of further regulations, others will result in immediate change.

Amongst the immediate legislative measures are changes to the completion notice regulations; these have been amended to now enable service on refurbished buildings rather than just new buildings, ensuring consistency between the two.

Further immediate changes include those made to Material Change of Circumstances, whereby changes to legislation and licensing are no longer grounds for a reduction during the life of the rating list. This broadly follows on from the changes of the last few years where Covid was excluded from the scope of MCCs. However, the Act seemingly goes much further than this. It will be important to see how this is implemented in practice by the Valuation Office Agency.

Arguably the most significant change for businesses has not been implemented immediately: a new obligation to provide information to the Valuation Office on an annual basis. The draft explanatory note suggests It has also committed not to introduce an additional obligation on ratepayers for an annual confirmation before it is satisfied that meeting that obligation will be straightforward.

It remains to be seen whether meeting this new obligation will ever be truly straightforward, considering the challenges still faced by many ratepayers trying to navigate the current CCA system and property claim processes. This new disclosure requirement will unquestionably need careful consideration before launch to ensure it meets with policy objectives, without becoming a major drain on both time completing the submission and finances through penalties where compliance isn’t easily achieved within the strict time limits, for businesses.

Particularly challenging will be the requirement on small businesses, many hundreds of thousands of which have had no business rates to pay, and therefore little engagement with the rating system for many years. These business owners will need to find time, resource and expertise to complete these returns under threats of penalties, so comprehensive guidance and timely support for this process by the Valuation Office Agency will be critical, once launched.

Lewis Rendle, Head of Audit

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