J Gowland MRICS DipRating
Ratepayers facing uncertainty after 200 years of the modern Rating system
As we move closer to Reval 2023, our Managing Director John Gowland, discusses the up-and-coming publication of the draft Valuation List and what needs to happen before 1 April 2023.
The history of General Revaluations in Northern Ireland
Non-Domestic Rating in Northern Ireland dates back to the early 1800s when financing was required for public works such as roads and bridges. At this time, rates were raised by the County or Grand Jury Cess in a rough and ready way and chargeable on each barony according to the specially weighted area of that barony. A Cess collector was appointed to collect the rate as he saw fit, and no method was laid down to ensure that individual Cess payers were treated fairly. As the rate increased over the years, unrest started to appear, with ratepayers voicing their concerns that the system was unfair. This led to Parliament in 1824 enacting legislation that would create a more equal way of assessing the rate and provide for the first General Survey and Valuation of any jurisdiction in the United Kingdom.
The next major update to rating came in the form of the Valuation Act 1852, and albeit with some amendments, this is the basis on which all non-domestic property in Northern Ireland is valued for rating purposes to this day.
The County or Grand Jury Cess may be long gone; however, Land & Property Services (LPS) an Agency of the Department of Finance of the Northern Ireland Executive, carry out the modern-day function of rates collection in Northern Ireland.
Reval 2023 will mark the 8th Non-Domestic General Revaluation since 1935 and will come into effect on 01 April 2023.
On behalf of The Department of Finance, the Commissioner of Valuation shall conduct a general revaluation of over 74,000 non-domestic properties in Northern Ireland. The new valuation list will come into force on 1 April 2023 and will reflect market changes that have taken place between the last antecedent valuation date of 1 April 2018 and the new antecedent valuation date of 1 October 2021.
Key dates for Reval2023
The Department of Finance has published a list of key dates relating to Reval2023:
1 October 2021: This is the valuation date for NI Reval2023. LPS will begin to invite businesses to complete a Rent and Lease Questionnaire (RALQ)
15 December 2021: Setting of Decapitalisation Rates Consultation closes.
31 December 2022: Deadline for businesses to complete RALQs.
1 April 2023: New rate bills issued. These will be based on October 2021 rental property values.
Draft valuation list
Ratepayers are faced with a “Cost of Doing Business” crisis due to an extremely challenging economic climate. With less than 5 months before new bills go out to all businesses in Northern Ireland, the Department has failed to provide Ratepayers with any certainty of when the draft valuation list will be published. This uncertainty is causing huge anxiety among the business community and there is a need to know sooner rather than later what impact Reval2023 will have on their business activities from 1 April 2023.
Furthermore, the Rate Poundage for each council needs to be published when the draft valuation is publicly available, as a new rateable value is of no use to the business community if they don’t know if rates will increase in line with or ahead of inflation.
Impact on ratepayers
Not only are individuals and families faced with a “Cost of Living Crisis” but the financial pressures are also being felt across the business sector. Ratepayers are faced with a “Cost of Doing Business” crisis due to an extremely challenging economic climate. Interest rates are at the highest point since 2009, and energy and fuel bills are increasing and are only likely to worsen when the government's energy support ceases next April. This will be specifically acute at a time when new rates bills are hitting ratepayers across Northern Ireland.
Many businesses are currently reviewing their forecasts for the coming year. This has resulted in higher prices and the need for restructuring parts of their businesses to cope with the financial burden of doing business at this time. To alleviate the pressures of uncertainty, the Department needs to indicate when the draft valuation list will be published.
Furthermore, the business community should be invited to review their new rateable values and have the opportunity to challenge their assessment when the draft list is published, rather than ratepayers having to wait until 1 April when the list is in force only to be told that the assessment “is in tone with the list”.
Early publication of the draft valuation list needed…sooner rather than later
Therefore, we urge The Department of Finance to provide a firm date for publication of the draft 2023 Valuation List as a matter of urgency so businesses can plan for the possibility of a significant change to their liability.
Many businesses across Northern Ireland are closing or are on the brink of closure, and a hike in rates bills in the coming months will only worsen the problems for many across the business sector. The Department needs to better manage ratepayers’ expectations by publishing the draft valuation list as soon as possible, as the last thing they need is any big surprises come 1 April 2023.
The Rating system is already under the spotlight, with many industry bodies calling for it to be abolished. Therefore, after nearly 200 years since the foundations were laid for the modern rating system in Northern Ireland, ratepayers need to be put at the forefront of the Department’s consideration and any uncertainty about the next General Revaluation needs to be alleviated by the early publication of the draft list.