Business rates – the 2023 revaluation impact

The new business rates valuation list came into effect in April 2023, based on property values from April 2021. While many retail and hospitality businesses have seen their rateable values fall, others—particularly in the industrial and logistics sectors—have seen sharp increases.

It is important to check your new rateable value and ensure you are claiming all available reliefs, such as the retail, hospitality, and leisure relief, which has been extended and increased to 75% for 2023/24.

Understanding the revaluation

Business rates are calculated based on a property's 'rateable value', which is an estimate of its open market rental value. The Valuation Office Agency (VOA) periodically reassesses these values to ensure bills reflect changes in the property market. The 2023 revaluation was based on rental values as of 1 April 2021, a time when the pandemic had significantly altered demand for different types of commercial space.

Winners and losers

The shift to online shopping during the pandemic caused retail rental values on the high street to plummet, resulting in lower rateable values and reduced business rates for many physical shops. Conversely, the boom in e-commerce drove massive demand for warehousing and logistics space, leading to steep increases in rateable values for the industrial sector. Offices saw a mixed picture, depending heavily on location and quality.

Transitional relief and appeals

To protect businesses from sudden, massive increases in their tax bills, the government introduced a transitional relief scheme. This caps the percentage by which a bill can rise each year following the revaluation. If you believe your new rateable value is incorrect, you have the right to challenge it through the 'Check, Challenge, Appeal' process. However, this process is complex, and it is highly recommended to seek advice from a specialist rating surveyor before initiating a challenge.