Government to Review 'Frequency of Revaluations' in UK Business Rates Regime

Business rates may be re-valued more frequently after the government gave a review into the controversial tax system the scope to look at how often commercial properties are valued.

Chancellor George Osborne gave the go ahead in his 2013 Autumn Statement to a review of the administration of business rates in the UK, which the government says raises £23bn annually for local authorities to spend on public services.

These rates are a tax based on property values, levied on businesses by local councils operating under their jurisdiction. The UK's Valuation Office Agency values every non-residential property from which the rates are calculated.

The review's terms of reference said it should look at the "frequency of revaluations to enable tax assessments to be based on up-to-date property values".

There are a number of reliefs and reductions in the complex and controversial system, but many struggling retail firms say will put them out of business before the review is complete.

"In considering possible changes to the business rates system to be made post-2017, the review will balance the need for any system to deliver fairness, stability and predictability to ratepayers," said the terms of reference.

"Any changes will need to maintain the aggregate tax yield from which to fund local services, preserve the same level of financial autonomy to authorities and the local incentives to promote growth that were delivered through the implementation of the business rates retention scheme introduced on 1 April 2013."

In his Autumn Statement, Osborne extended the business rate relief scheme for another year to 2014/15, capped their increases at 2%, and allowed firms to pay them in 12 monthly instalments.

He also introduced a "Reoccupation Relief" which halves business premises rates for firms moving into empty stores on UK High Streets. And offered a £1,000 discount on rates for every retail premises worth up to £50,000.

"More frequent valuations will make the system more responsive to economic conditions which is something businesses have called for," said a spokesperson for the Federation of Small Businesses (FSB).

"We look forward to inputting our ideas into the review."