One of the key changes is that ratepayers will now be required to notify the Valuation Office Agency (VOA) within 60 calendar days of any changes to occupier and property characteristics that affect their assessment of liability for business rates.
"This includes changes such as alterations to a property, starting or stopping occupancy, or changes to rent!"
This new obligation will allow for more frequent property valuation and a more accurate calculation of business rates. The applicable penalty regime has also been redesigned to provide businesses with sufficient opportunities to comply before financial penalties arise. If requirements arise under both the VOA and the digitizing business rates system, a ratepayer will not be penalized twice, even if they fail to comply with both requirements.
Ratepayers will also be required to submit an annual confirmation that they have provided all the necessary information. The confirmation must be submitted within 60 days after 30th April, which is the end of each assessable year. The Government will not introduce this annual confirmation process until it has been ensured that it will be straightforward for ratepayers to complete.
"HMRC recently undertook a consultation during the summer of 2022 on 'digitizing business rates'"!
The project aims to match up the details of businesses held by HMRC and local billing authorities. This would potentially allow HMRC to target future business rates relief more effectively and for both authorities to more easily spot when tax or business rates avoidance is being carried out.
As a result of the consultation, HMRC has decided that additional information required from ratepayers to allow this matching will be captured as part of the VOA requirement. This new obligation will require ratepayers to provide tax or other reference numbers, with an accompanying sanctions regime for non-compliance. The Government, however, will design the sanctions regime in a manner that encourages and supports ratepayers to comply with their digital business rates obligations.
HMRC has also decided that the digitizing business rates project will not immediately include a portal through which businesses can view all their tax and business rates information in one place. It's coming though!
The business rates system in the UK is undergoing significant changes to make taxation more efficient and transparent. Ratepayers will be required to provide prompt notification to the VOA of any changes to occupier and property characteristics, and a new obligation will require ratepayers to provide tax or other reference numbers for digitizing business rates.
"The new penalty regime is designed to provide businesses with opportunities to comply before financial penalties arise!"
The annual confirmation process will be introduced once the Government has ensured that it is straightforward for ratepayers to complete. Overall, I expect these changes to streamline the taxation process and make it more effective for both businesses and the Government.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the upcoming changes to business rates, it may be a great idea to call me on 01908 774320 and let's see how I can help.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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