The Welsh government has published a new consultation ‘Reforming non-domestic rates in Wales’. It looks at improvements to ensure that Welsh ratepayers contribute fairly to the services they receive and that the services ratepayers rely upon are properly funded.
At a glance
The Welsh government is seeking views on reforms to non-domestic rates, creating opportunities to make improvements specifically for Wales to better support ambitions for clear and stable tax devolution and the reformation of local taxes in Wales.
The consultation proposes:
- More frequent revaluation cycles (from five-yearly to three-yearly) to ensure that rates valuations more accurately reflect up-to-date market conditions.
- Improvements to the administration of valuation functions and rating lists including setting out in the legislation which matters should and should not be taken into account between revaluations.
- Improving the flow of information between government and ratepayers to allow for more frequent revaluations and improve the accuracy of rating lists.
- In line with recent Proposals for England, the Welsh government proposes a new duty to provide information to the Valuation Office Agency (VOA) through an online service, with penalties for failure to comply, to be activated during the rating list in 2023.
- Providing the Welsh Government with more flexible legislation to amend reliefs and exemptions in future years together with a review of those reliefs and exemptions to ensure the support available is targeted in the most effective way.
- Providing greater scope to allow for different multiplier rates to be set in future such as:
- Lower multipliers for small businesses.
- Sector-specific multipliers.
- Multipliers set by geographic locations.
- Further measures to ensure the Welsh government can continue to tackle rates avoidance, including the introduction of a General Anti-avoidance Rule (GAAR) for NDR.
The consultation does not ask for views on specific changes which may be required ahead of the implementation of the next Non-Domestic Rating (NDR) list, following the next revaluation on 1 April 2023. Any such changes will be considered separately, as more information on the impact of the revaluation becomes available.
The consultation does not, at present, suggest changing the current system whereby NDR values are provided by the VOA for England and Wales but it does note that the Welsh government is continuing to explore the potential for a local land value tax as a replacement for NDR and possibly council tax.
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.
Welsh Land Transaction Tax (LTT)
What is Land Transaction Tax? How does it operate? What reliefs are available?
Questions about enabling more frequent revaluations:
Q1 Do you agree revaluations should occur at least every three years in future, to maintain fairness in the system by ensuring valuations are updated more often to reflect changing economic conditions? What are your reasons for your answer?
Q2 Do you think revaluations should occur more frequently than every three years? If so, how often would you suggest?
Q3 Do you think the gap between the antecedent valuation date and the revaluation taking effect should be less than two years, if possible, in future?
Q4 Do you have any views on the proposals to create a duty on ratepayers to inform the VOA if certain information relating to the hereditament changes, and the new duty to provide annual confirmation, support more frequent revaluation and the maintenance of accurate rating lists?
Q5 Do you have any views on the proposals for a proportionate compliance regime to support the duty to provide information? In particular, do you consider the proposed penalties to be fair and proportionate?
Q6 Do the proposed timescales provide ratepayers with enough time to meet their obligations? If not, under what circumstances would this not be possible?
Questions about providing reliefs and exemptions:
Q7 Do you have any views on the proposal to undertake a review of relief schemes and any views on how their effectiveness should be considered? What factors should a review take into account?
Q8 Do you have any views on our proposals to enable the Welsh Government to amend, remove and create new statutory reliefs by secondary legislation to align to policy priorities?
Q9 Do you have any views on the proposal for the Welsh Government to have greater flexibility to provide for exemptions by secondary legislation, to align to policy priorities?
Q10 What is your view on the proposal to give local authorities greater flexibility to award retrospective discretionary relief?
Questions about varying the multiplier:
Q11 What is your view on proposals to provide the Welsh Government with the ability to vary the multiplier for properties of different use, rateable value and geographical location, to align to policy priorities?
Q12 Do you have any other suggestions for parameters that could be considered in varying the multiplier?
Questions about improvements to valuation and rating list administration
Q13 Do you have any views on proposals to ensure that changes in economic factors, market conditions or changes in the general level of rents are addressed through more frequent revaluations, rather than as material changes of circumstances between revaluations?
Q14 Do you think the proposed changes to completion notice procedures will help to ensure all relevant properties are listed for NDR in a timely manner?
Q15 Do you have any views on proposals to improve administration of the central rating list?
Q16 Do you have any views on proposals for a general anti-avoidance rule for NDR in principle?
Q17 Do you think local authorities should have more powers to enable them to counteract NDR avoidance effectively?
Questions about other approaches to raising local taxes
Q18 What are your views on taking an alternative approach, such as a local land value tax, to raising local taxes, over the longer-term?
Questions about other aspects of NDR reform
Q19 We have asked a number of specific questions about the reform of NDR. If you have any related points which we have not specifically addressed or if you wish to comment on other aspects of NDR reform, please use this space to record your comments.
Questions about the Welsh language:
‘A Wales of vibrant culture and thriving Welsh language’ is one of seven well‑being goals in the Well-being of Future Generations (Wales) Act 2015. The Welsh Government recognises the importance of Welsh-medium education and is working towards the aim of a million Welsh speakers by 2050.
Comments are invited about the effects (whether positive or adverse) that our proposals for NDR reform may have on opportunities for persons to use the Welsh language and on treating the Welsh language no less favourably than the English language.
Q20 The Welsh Government would like your views on the effects these proposals would have on the Welsh language, specifically on:
1. opportunities for people to use Welsh; and
2. on treating the Welsh language no less favourably than English.
Q21 Please also explain how you believe the proposals could be formulated or changed so as to have:
1. positive effects or increased positive effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language; and
2. no adverse effects on opportunities for people to use the Welsh language and