The changes to the calculation of business rates would apply to both England and Wales. The Scottish Government has also announced its intention to change the law.
Business rates are charged on most non-domestic properties, such as shops, offices, pubs and warehouses. Business rates are calculated by using the ‘rateable value’ of a property, or part of property, which is liable for business rates. The Valuation Office Agency (VOA) sets the rateable value in England, the Scottish Assessors in Scotland, and the Land and Property Services Department in Northern Ireland. The rateable value is designed to reflect the rent that a property would expect to attract on the open market.
Since the Covid-19 pandemic, the VOA has been receiving a large number of ‘checks’ (the first stage of the appeals process) from businesses wishing to challenge the rateable values of their properties. The Government has argued that the changes in rental values caused by the pandemic “are part of the general market conditions and, as such, should where necessary be reflected in updated rateable values at each revaluation”. On 25 March 2021, the Government announced primary legislation would be introduced. The bill seeks to change the ways in which business rates are calculated so that the impacts of the Covid-19 pandemic are not, in most cases, considered in rateable values decisions.
The bill also proposes to extend the disqualification regime to directors of dissolved companies. This was first suggested in a 2018 consultation. Investigation of the conduct of directors is a reserved matter and therefore the bill would apply to England, Scotland and Wales. In Northern Ireland it has been transferred. However, the bill would also apply to Northern Ireland and a legislative consent motion has been obtained.
No amendments were made at the bill’s Commons committee stage. During report stage the Government, at the request of the Welsh Government, made amendments to ensure that the bill’s clause on business rate calculation applied to Wales (previously the clause applied only to England).
The bill is scheduled to receive second reading in the House of Lords on 26 October 2021.