Communities and Local Government
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Sent by E-mail to: NDR2010.Revaluation@communities.gsi.gov.uk
23 September 2009
Dear Sir/ Madam,
The transitional arrangements for the non-domestic rating revaluation 2010 in England - Consultation paper
The Institute of Revenues, Rating and Valuation [IRRV] is pleased to provide this response to the above consultation paper.
Introduction
The IRRV is the professional body concerned with all aspects of local taxation in the United Kingdom. Its members are engaged in the valuation of property for taxation, local tax administration, the appeals process, local authority benefits and financial management in local government. The Institute represents the professional interests of its members who work within these disciplines.
Q1: having regard to the cost of the transitional relief, do you think the caps on increases for small properties adopted at the 2005 revaluation should be repeated for the 2010 revaluation?
Yes.
Q2: having regard to the cost of the transitional relief, do you think the caps on increases for large properties adopted at the 2005 revaluation should be repeated for the 2010 revaluation?
Yes.
Q3: do you think that transitional relief should be provided over four years (options 1 and 2) or 5 years (options 3 and 4)?
The Government has always said that transition was to protect from significant, sudden and unpredictable increases given the short timeframe from publication of RVs to issue of bills. If a business has prospered and has paid an increased rent or is trading in a location of increased rents, it is likely to be relatively more prosperous. Granted there should be some degree of protection from the biggest increases and especially in a major recession; but giving notice of full liability three and a half years after the 2010 RVs have been published, is ample. Such a scheme would also allow for more frequent revaluations. The shorter the revaluation period the less need for transition as the RV change and standard deviation would be reduced. We accept however that there would have been big changes had we had revaluations at say 1/4/07 and 1/4/2010 - that's an exceptional scenario.
Within the parameters of the consultation paper options, our preference would be for transitional relief to be provided over four years. A transition scheme under which there are ratepayers who never pay true liability for any of the 5 years all but negates the purpose of revaluations. We wish to flag up however our view that there should be debate about reducing the revaluation period to three years, with an AVD one year prior to the list coming into effect (in our view VOA technology would be able to cope with this); and with a relief scheme that ends at the end of the three year period.
Q4: do you think the transitional relief should be funded by downward caps on reductions in bills (options 1 and 3) or by a supplement levied on other ratepayers (options 2 and 4)?
A significant proportion of ratepayers will be in real need of revaluation benefits but would be denied those by downwards phasing. Discussion within IRRV indicates a very clear preference for a supplement levied on other ratepayers.
The UBR supplement should be paid for over the revaluation cycle - over five years whilst we have a five year cycle. That would mean some up-front funding by the Government to support the scheme in years 1 and 2, but they would be guaranteed its return in years 3, 4 and 5 due to the UBR supplement. This would be a vast improvement over the 2005 scheme which was designed to be revenue neutral within year, but actually cost the Exchequer £821millions in 2005/6 and over one billion pounds over the full 5 years.
Yours truly,
Roger Messenger BSc FRICS IRRV MCIArb
Chairman, IRRV Valuation Faculty Board
E-mail: valuation.faculty@irrv.org.uk
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