The VOA are currently preparing the 2023 Rating List. As with all revaluations there will be winners and losers.

In general terms we are expecting office assessments (particularly in London) to remain broadly the same as in the 2017 list; retail and leisure assessments, particularly in the provincial centres to fall significantly; and industrial assessments to increase. The rateable values should reflect the changes in the rental markets between the rating lists and therefore none of the above should be a surprise. Industrial rents, particularly in the South east have risen significantly over the period and retail rents have fallen significantly and the rating assessments should reflect these market changes.

The bigger issue for ratepayers, however, is what the Government will do as regards phasing. On previous lists where an assessment has increased significantly the Government’s upward phasing provisions have been such that ratepayers have paid rates on their new assessments fairly quickly as the upward phasing provisions have not been particularly beneficial to ratepayers.

Unsurprisingly the downward phasing provisions have historically been punitive for ratepayers and where an assessment has decreased by say 50% the downward phasing provisions have meant that the ratepayer did not see the full benefit of the decrease for in many cases between 4 and 5 years.

The Government have not made any announcements regarding phasing for 2023 and, in consequence, the struggling sectors such as retailing, hospitality etc who have experienced the largest fall in rental values are very concerned as to how quickly they will see the benefit of falling rateable values. Throughout the pandemic the Government have recognised the significant difficulties experienced in these sectors and have made them a “special case “. The industry awaits to see whether this will continue as we head into the 2023 List and by and large the phasing provisions for the 2023 List will determine the true winners and losers.

At the other end of the spectrum, many landlords fear that the expected significant increases in industrial rateable values may inevitably result in a slow down in the rate of increase in industrial rents. Most occupiers look at the total occupation costs and were industrial rateable values to increase by say 30% this inevitably would result in a downward pressure on achievable rents.

The complexities and inequalities provided by the present rating system demonstrate very clearly the need for a substantial overhaul of a system which has not been fit for purpose for many years. Governments of all colours since the early 1970s have promised reform but as yet, influenced by the significant tax take, none have been prepared to grasp the nettle.