Avison Young calls for an end to downwards transition
Over the life of the 2017 rating list, the inequity of downwards transition has been clear to see, costing close to 70,000 businesses over £2.5 billion.
None of these businesses received the immediate benefit of a reduced liability following the revaluation, instead realising small, phased reductions in liabilities over a period of up to five years.
The sector worst affected by the scheme was traditional retail which, at a time of struggling margin and reduced market share from online sales, accounted for close to 40% of the cost.
The 2023 revaluation will see major falls in rateable value for the retail sector and we estimate that this will result in a reduced liability over 3 years of circa £8.5 billion. These businesses fully deserve to receive this benefit in full and not have their savings severely restricted through a downwards transition scheme.
We once again urge Government not to introduce a downwards transition scheme for the 2023 revaluation, which is penal to struggling businesses. If the Government decides it is fair to help those facing increases in liability from the revaluation through an upwards transition scheme, then this should not be subsidised by those facing decreases.
The Government has announced that they will bring forward a consultation on transitional relief in 2022, ahead of the next revaluation, to inform the design of the next scheme. The next transitional relief scheme will then be confirmed in Autumn 2022.
