New regulations complicates already groaning business rates regime - Dunlop Heywood
By Stuart Hastie, Director A respected business rates expert recently said that seldom has the title of a new set of regulations given less clue as to its real purpose. He was referring to the Non-Domestic Rating (Alteration of Lists) and Business Rate Supplements (Transfers to Revenue Accounts) (Amendment etc.) (England) Regulations 2018. I have to agree with him and, with the risk of seeing my regular followers (both of them) desert before they get to the third paragraph, I had to include the full snappy title. The reason I am covering at all is that the regulations allow ratepayers, in limited circumstances, to make proposals to alter the 2010 Rating lists in England – to reverse the effects of the decision of the UK Supreme Court in Woolway (VO) v Mazars LLP (2015). I have already written about this case at length but, in summary, the decision had the effect of requiring properties that shared common areas but didn’t directly interlink (such as adjacent office floors only accessible via common areas of the building), to be treated as separate hereditaments for rating purposes. In some cases, valuations for business rates altered significantly; in others, ratepayers lost entitlement to small business rate relief. In the worst affected cases the changes took effect retrospectively to 1 April 2010. It was these worst-case scenarios that led to the Government introducing the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018,. The Act allows properties which satisfy a definition of “contiguity” to be treated as a single hereditament, where they are occupied by the same person and for a similar purpose. The new regulations now allow ratepayers to make proposals to alter the 2010 rating lists to give effect to this. The regulations allow ratepayers, not the VOA, to make such proposals between 17 Dec 2018 to 31 Dec 2019, by providing a new ground for proposals and meeting the new definition set out in the new Act. The regulations also allow ratepayers who may qualify for exemption from business rates under the Non-Domestic Rating (Nursery Grounds) Act 2018, to seek to have their properties removed from the rating list. The new regulations will no doubt be welcomed by those affected most by the Mazars’ ruling. From my side-line perspective it is just another example of sticking plaster legislation on a tax system that is already groaning with red tape, exemptions and relief schemes. The promised overhaul still seems to be a very faint light at the end of a very long tunnel. I even read somewhere that the Government’s treasury select committee is planning its own inquiry into business rates this year. Laudable but I’m not sure it will turn up anything we aren’t already aware of. It might generate a few more headlines, more pleading and hand wringing in various sectors, but I can’t see it prompting the Government into action any sooner.
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