NON-DOMESTIC RATING ACT 2023 CHANGES

The 2023 Non-Domestic Rating Act received Royal Assent at the end of October.

The Act runs to some 60 pages. This is a brief summary of the main changes.

The background to the Act is via consultations carried out from 2020 onwards and also with regard to the “emergency” changes in law during Covid. The Act will affect liabilities for some, and administrative duties for all.

The Rating List: Duration of a Rating List will now be 3 years instead of 5, paving the way for this duration to be further reduced in the future. In the short term, the next Revaluation will be in 2026. Further legislation will be required, if the new 3 year duration is to be changed.

Transitional Relief: A TR scheme is required by law in England, but it is no longer a requirement for it to be revenue neutral. Traditionally, upwards relief was funded by a balancing downwards relief (actually a penalty), but the Act removes that requirement and allows the change already made for the 2023 List (by discarding the future increases above CPI levels which had been provided for as the 2023 balancing factor).

Rate reliefs:

Discretionary Rate relief applications were subject to a time limit of 6 months after the expiry of the rate year for which the relief was being claimed. They can now be made with retrospective effect from a start date limited to 1/4/2022 (for revenue protection reasons) but are still subject to discretionary consideration.

Rural rate relief continues but is now mandatory for qualifying village shops.

Billing Authorities will have discretionary power to charge a small business multiplier to hereditaments assessed at over £51,000 RV by dis-applying the 1.3p in £ rate supplement.

Improvement Relief: A new relief will apply from 1/4/2024 for improvement works completed by 31/3/2028. The relief will last for 12 months after the works are complete, with the cut off date for receipt of relief being 1/4/2029. This will negate any extra liability for the first year following qualifying improvement works, including additions and extensions. However, there are limitations insofar as the ratepayer must occupy the property on each day since the works commenced to qualify for relief and the property must remain in the Rating List. Therefore, relief won’t apply where a landlord improves a vacant building or where the assessment is deleted during a full redevelopment, or on a re-sale.

Completion Notices: In addition to new builds, from the end of 2023, these can now be served on assessments deleted from the rating list during refurbishment, regardless of whether structural alterations have been made (this was a loophole previously). The plan is to also bring extensions to existing hereditaments into the Completion Notice procedures. The very short period to appeal a Completion Notice remains at 28 days.

The Data Changes:
Ratepayer Registration for each property: For the 2026 Revaluation, ratepayers will be expected to log their Government Gateway unique identification details (VAT number, National Insurance number or Unique Tax Reference number) within 60 days or face a fine. This raises the prospect of ratepayers without a VOA account dashboard, including those without a current liability, having to register for a portal the first time. Additionally, existing account holders will need to log all properties, not just those they wish to CCA (“appeal”).

Duty to Notify (DTN); Ultimately, this will replace the Check stage of CCA. Notifiable information, defined as anything affecting the existence of a rating assessment, the extent of a hereditament or the rateable value of a property, will need to be provided to the VOA within 60 days of a change.

This will include physical alterations, together will tenure and, where relevant, trade information figures.

In addition, ratepayers will be required to complete an online return within 60 days after 30th April of each year, with confirmation required of both changes and “no changes”.

The VOA may serve notice on an owner or occupier if they believe that a relevant change has occurred. Throughout the process, there will be penalties for non-compliance – both financial and procedural (in terms of taking away the right to make a CCA), and false information can even be treated as a criminal offence.

We are expecting the data changes to be introduced before 2025/26, as it is evident that they must be in place before the 2026 Revaluation comes into effect on 1/4/2026.

Material Changes (MCC CCA): This is an extension of the powers introduced during Covid, whereby anything directly or indirectly attributable to Covid was not regarded as an MCC. The Act now precludes certain matters from being treated as a Material Change in Circumstances (MCC) between rating revaluations. These include:

1. Matters affecting the physical enjoyment of the hereditament, and
2. Matters physically manifest within the locality resulting from:

• Legislation
• Advice or guidance from any public authority
• Provisions under legislation
• Anything done with a view to complying with any of the above.

If you require any assistance with any of the above points, please get in touch with your usual contact or email mua@mua.co.uk

We will keep you advised of further details about these changes as a framework emerges.