New legislation brings forward business rates revaluations in England, says NHBF

Business rates are based on an accurate estimate of a property’s rental value on the open market at a set date.  New legislation has been introduced to make sure that property revaluations in England are done every three years, rather than every 5 years.  The next property revaluation will now take place in 2021 rather than 2022.

It has already been confirmed that revaluations in Wales will take place in 2021, in line with England.  Similar legislation is likely to be introduced in Scotland, although currently the next revaluation is expected to take place in 2022. 

Earlier and more frequent revaluations give salons a better chance of business rates more accurately reflecting their current value on the rental market

Hilary Hall, NHBF chief executive, said: “Especially for salons in areas where commercial rents are falling, this is good news.  Earlier and more frequent revaluations give salons a better chance of business rates more accurately reflecting their current value on the rental market.  Of course, the opposite is true for salons in areas where rents are going up.”

According to a recent survey by the NHBF, around two thirds of hair salons, beauty salons and barbershops don’t pay business rates at all because they qualify for small business rates relief.  Larger salons are more likely to pay business rates, which are becoming an increasing financial burden.  Almost half (42%) reported that their business rates had gone up when they were last revalued in April 2017, although 13% had seen their rates go down. 

Discounts of up to one third are available for businesses with a rateable value of £51,000 or less in 2019-2020 and 2020-21.  In the NHBF survey, 41% of salons said they were unaware of this additional relief and many were unsure whether they had to apply for it or whether it would be automatically applied by their local authority.

Across the UK, a Digital Services Tax will be introduced.  It will be a narrowly targeted tax on the UK-generated revenues from digital platforms such as EBay, Amazon, social media or search engines, rather than an online sales.  The government’s Communities and Local Government Select Committee report published in March highlighted that Amazon contributes less than 1% of its turnover in business rates, whereas ‘bricks and mortar’ premises contribute anything from 2% to 7% of their turnover in business rates.