HMRC have opened a new consultation ‘Digitalising Business Rates: connecting business rates and tax data’. The aim is to join up tax and business rates data to improve compliance, better target policy, and enable businesses to better understand and review their tax liabilities by having them all in one place.

The consultation follows the 2021 Business rates review and Technical consultation both of which proposed Digitalising Business Rates (DBR), with funding being allocated to this in the March 2021 Budget.

The limitations of the current system, which makes it difficult for the government to precisely target support for businesses, were highlighted during the COVID-19 pandemic. The government has identified that bringing together businesses’ property data and tax information in one place will allow them to better design and apply reliefs and financial support for businesses, rather than having to rely on property information in isolation.

The intention, bearing in mind that there are around two million properties liable for business rates in England, is to create a new joined-up system that allows:

  • Business rates data to be matched with central HMRC tax data.
  • Business rates information to be displayed alongside other tax information in a standardised manner.

It aims to make the provision of information quick, easy and convenient for ratepayers.

Under the proposals:

  • Local authorities would remain responsible for the billing, collection and enforcement of business rates and for deciding what reliefs businesses are entitled to.
  • There would be data sharing across the different systems e.g. HMRC, the Valuation Office and local authorities, but with the payment system remaining unchanged.
  • There would be penalties for not complying with the new DBR requirement but the intention is that agents should be able to assist with this.

More detail will be available once the project moves past this initial design stage.

The planned implementation of DBR will be after 2024, with an estimated date of 2026-27 onwards.

The consultation ends on 30 September 2022. Responses should be sent to This email address is being protected from spambots. You need JavaScript enabled to view it. or an online survey can be completed instead here

Consultation questions

Question 1: How would Welsh Local Authorities, ratepayers, agents and broader stakeholders feel about the possibility of DBR being extended to Wales?

Question 2: Do ratepayers know/can they find their SA/Partnership/CT UTR and VRN? If not, what would make this easier?

Question 3: Where ratepayers do not have one of these reference numbers, would identifying themselves as a taxpayer by providing a National Insurance Number or Company Reference Number cause any issues for them? If so, what are they?

Question 4: If ratepayers alternatively needed to provide property reference numbers, would it be easier for them to provide a) a Billing Authority (BA) reference number plus BA name b) a BA reference number plus 4-digit BA code, or c) a Unique Property Reference Number?

Question 5: Are there scenarios where ratepayers might not have any relevant reference number? Including where a ratepayer may not be registered for tax purposes? If so, what are they?

Question 6: Are there scenarios where a person or entity’s identity in the tax system (with one tax reference number) may not precisely align with their legal responsibility as a ratepayer? EG, where multiple ratepayers share the same tax reference number, or multiple entities for tax purposes share one responsible legal identity in a business rates context?

Question 7: When might a taxpayer reference that is associated with a property portfolio under DBR change? (eg, registration for self-assessment, incorporation or disincorporation, VAT-registration or de-registration, mergers and acquisitions). Are there scenarios where the new reference number might not precisely assume the property portfolio associated with the previous number?

Question 8: In which type of customer journey would it be easiest to provide your reference number(s) (option A, B or C) and why? Would any of the options be particularly difficult?

Question 9: What are the main challenges presented with each ‘data in’ option and how could they be addressed?

Question 10: Under option B – what process would be best for ratepayers (or their agent) to provide their tax references to Billing Authorities and why? Or would a standalone process be preferable?

Question 11: Under option C – what process would be best for ratepayers (for their agent) to provide their property references to HMRC and why? Or would a standalone process be preferable?

Question 12: To what extent would ratepayers expect to log in themselves to provide tax or business rates information with a single set of verified credentials (rather than setting up multiple credentials or using an agent)?

Question 13: Other than those outlined in this document, are there any options for how DBR might collect data to enable matching of taxpayer and ratepayer information that would work better to achieve the policy aims?

Question 14: What processes might ratepayers (or their agents) have to put in place to meet their obligations under each option and what costs might this bring?

Question 15: How much might you expect it to it cost BAs to upgrade systems to export billing information to HMRC? Please provide the evidence or assumptions that support your estimate. This will help inform new burdens funding estimates.

Question 16: Would you use a service that allows you to view business rates information for all your properties across England in one place, alongside other HMRC tax liabilities? Yes/No

If yes, how often and for what purposes?

If yes, how useful would you find such a service – on a scale of 1 to 10, where 10 is extremely useful?

If no, would being able to pay your bill(s) through the service change your response?

Question 17: When thinking about how often (your) bills change, how often should the business rates billing information be updated? (eg daily, weekly or whenever a ratepayer seeks to view their billing information). Options: real time look up/daily/weekly/monthly/quarterly/annually.

Question 18: Could DBR data help with targeting and administering reliefs? If so, for which reliefs would it be help most and why?

Question 19: Is there any other data that DBR could provide to help billing authorities feel more confident when awarding reliefs and/or grants?

Question 20: If option A for ‘data in’ is pursued, you think DBR should be included within the sanctions regime for the new VOA duty or have a separate sanctions regime?

Question 21: If separate, or if options B and C are pursued, do ratepayers have views about adopting a similar penalty regime to the one proposed for the VOA’s new duty?

Question 22: What concerns do stakeholders have about a DBR sanctions regime?

Question 23: Do you envisage risks with applying the principle of conditionality to new or redesigned reliefs? If so, how can these be mitigated?

Question 24: Are there alternatives to penalties not explored in this document that the government should consider?

Question 25: What are ratepayers’ and agents’ views on whether ratepayers will want their agents to discharge their duty to provide the mandatory reference numbers needed for DBR?

Question 26: Where a ratepayer wants an agent to discharge their duty to provide the mandatory reference numbers needed for DBR, do agents know/can they easily obtain the tax and property references set out in chapter 3? Are any more or less easily accessible?

Question 27: What are agents’ views on the benefits and any drawbacks of agents being able to access ratepayer’s business rates billing information through DBR?

Question 28: Do tax agents foresee any change in their clients’ expectation of them as a result of being able to access to their business rates billing information alongside their other tax information? If so, how and what are their views on the benefits and disbenefits of that change?

Useful guides on this topic

Business Rates: What's new
The government is exploring different methods for the reform of business rates. Proposals, including three-year rating valuations and have been set out in a number of different consultations as set out below.

External link

‘Digitalising Business Rates: connecting business rates and tax data’ 

Oak ad
Are you enjoying our content? 

Thousands of accountants and advisers and their clients use as their primary TAX resource.

Register with us now to receive our receive our FREE SME Topical Tax Update & newletter.