Business

Businesses urged to respond to latest rates revaluation process

Finance Minister Conor Murphy with commissioner of valuation Angela McGrath launch Reval2023.

THE process to reassess how much rates businesses should pay in Northern Ireland is under way.

The rental value of some 74,500 non-domestic properties is being recalculated to reflect the recent changes to the rental market.

Letters have gone out to businesses asking them to submit their current lease and rent details either online or via a paper questionnaire.

It comes just three years after the process last took place in 2020, based on 2018 rental values.

‘Reval2023’ will use the rental value of business premises on October 1 2021, with the new net annual value (NAV) list coming into effect in April 2023.

The Department of Finance, which undertook a review of the north’s rating system in late 2019, said Reval2023 is its response to calls from businesses and trade groups for more regular revaluations.

It’s now aiming to run the cycle every three years.

Around £675 million is raised every year via non-domestic rates here.

The department said yesterday that rates breaks introduced in response to the Covid-19 pandemic will have cost around £518m by the end of the current financial year.

The department said the reval process is not designed to raise more money, rather it’s intended to maintain fairness and reflect the recent changes in the economy.

Rates bills are calculated by combining the ‘rate in the pound’ set by councils and Stormont and multiplying the NAV.

It’s the NAV that’s currently being reassessed by Land & Property Services (LPS).

Calculating what licensed premises will pay is less straight forward. LPS uses a range of information, including trading receipts, the type of property and its location to work out an estimated annual trade for a hospitality venue, also known as fair maintainable trade (FMT).

A percentage is then applied to the FMT to work out a pub’s annual rental value.

That process proved controversial last year, when some of the most popular pubs in Belfast saw their NAV increase by between 100 and 500 per cent, while some major supermarkets chains had their NAV cut.

With the hospitality industry so disrupted over the past 18 months, LPS officials will assess pubs on 3.5 years of turnover to estimate the level of trade landlords can expect going forward.

It’s understood LPS is also liaising closely with hospitality groups to establish how the pandemic has impacted the industry.

Household rates will not be affected by the process, but it’s thought some businesses which have undertaken significant work to alter their home for business purposes during the pandemic could now be considered commercial for rates purpose.

Officials said the vast majority of people who are working from home have nothing to worry about.

Rates holidays since April 2020 have cost around £518m.

Finance Minister Conor Murphy has urged non-domestic ratepayers to send through their rental information.

“Revaluing over 74,000 non-domestic properties is a significant undertaking and it is important that all business ratepayers play their part,” he said.

“Business rates provide around £675m each year to support the public services we all use. Rates help to fund our hospitals, schools and roads as well as the essential services Councils deliver every day.

“Our aim is to ensure the rating system is distributed fairly across all business sectors. By fully providing the required information, business ratepayers will help ensure valuations reflect changes in the property market and economic conditions over the last three years.”

PLATFORM: Rebalancing your business rates - Conor Murphy

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