What is the Non-Domestic Rates Revaluation?
A rates revaluation is the full reassessment of the individual Net Annual Values (NAVs) of all 75,000 business properties in Northern Ireland.
Business rate bills are calculated by multiplying the NAV by the non-domestic regional rate in the pound and the non-domestic district rate in the pound for the council area in which the property is located.
New values will be used to calculate future individual rate bills for businesses and organisations.
Why hold a revaluation now?
LPS is carrying out this revaluation now to ensure that business rates stay up-to-date and reflect local economic changes by distributing rate liability fairly across all sectors in line with changes in rental values.
The last Non-Domestic Revaluation was in 2015. Currently business rates are based on 2013 values.
The new values, based on 2018 values, will be used to calculate future individual rate bills for businesses and organisations.
Social, economic and environmental circumstances change over time and do not affect all property sectors or geographical areas in the same way.
If we continue to use rateable values based on outdated levels of rents, this undermines the fairness and acceptability of the system.
How will this affect me?
LPS is urging business ratepayers to provide their rental information now in 2018. The data collected will be analysed and used to produce new rateable values. These values will then be used to calculate rate bills from April 2020.
LPS wrote to ratepayers asking them to complete a Rent and Lease Questionnaire (RALQ). The deadline for submitting the information online was 14 October 2018.
If you have missed the deadline, information can be submitted by emailing Revaluation2020@finance-ni.gov.uk or by calling 0300 200 7801.
Why should I submit my information?
Legislation requires that business ratepayers must provide the information; fines for non-compliance can be imposed. It is also in your interest to do so, to help ensure that you pay the correct amount of business rates from April 2020.
Who asked for this revaluation?
Regular business revaluations were supported by the business community in the consultation exercises in 2015 and 2016. This will ensure that the period between the last revaluation and this one falls within a five year time frame. Previous Finance Ministers supported more frequent business revaluations, recognising the importance of ensuring that the rating system remains closely aligned to market values for business ratepayers.
What is the cost of this revaluation?
LPS is undertaking this work largely within its existing budget through reprioritisation.
How long will this revaluation take?
Given the lead time required in revaluing over 75,000 business properties, work is being undertaken to ensure that the date of April 2020 is met. A project of this scale and complexity takes just under two and a half years to complete.
Is the revaluation about collecting more money?
The amount of money to be raised through rates will not change as a direct result of Reval2020. The purpose of a revaluation is to maintain fairness in the rating system, not to raise more revenue.
What impact will the revaluation have on my rate bill?
As a result of the revaluation some business rate bills will go down but some will go up. Many will stay almost the same. This is an exercise in readjustment. The district rate and the regional rate decide the actual level of rates paid.
The total amount of revenue to be raised through rates in general terms is fixed (this is called the rate burden). The rate burden is the total amount of money needed to be raised from rates to pay for public services in Northern Ireland.
This includes education, emergency services and health as well as leisure facilities, tourism and waste management.
The total amount of money to be raised through rates does not change as a result of the revaluation exercise. The same amount of money will still need to be raised to pay for public services. What will change is the proportion of the burden each ratepayer contributes.
It is impossible to say today, at the start of the revaluation exercise, what the impact on individual ratepayers will be. In general terms the impact on business ratepayers will depend on the relative changes in local rental values from the last non-domestic revaluation, ie from 2013.
When ratepayers are paying rate bills which reflect current property values the system is rebalanced.
How will my property be valued?
There are three industry standard methods to assess a rental value:
Comparative method - LPS analyses all actual rents collected, this method is used for the majority of properties such as shops, offices, warehouses and factories.
Receipts and Expenditure method - LPS analyses trading information such a turnover or throughput. This method is used to assess the rental value of a property where there is limited or no rental evidence available and the property’s rental value is related to its level of trade. A pub would be an example.
Contractor’s method - LPS analyses building costs and land values, this method is used to assess the rental value of a property where there is no rental or trading information available, for example a school or hospital.
LPS will continue to consult with professional bodies and trade associations throughout the revaluation project.
Will domestic properties be revalued?
There are no plans to have a domestic revaluation. Reval2020 relates only to business property.
Is the information I supply covered by Data Protection Legislation?
Yes, all the information gathered from the questionnaire is subject to the Data Protection Act and General Data Protection Regulation. LPS will use the information you supply for rating and valuation purposes and maintenance of your rate account. Your information will not be disclosed to third parties or other government departments unless the law requires or allows LPS to do so.
LPS has a duty to protect public funds and may use the information provided on these questionnaires for the prevention and detection of fraud.
More information can be found in the LPS Privacy notice
What happens next?
More information can be found in the link below:
What if the property is occupied by a registered charity?
Registered charities, like all other rateable occupiers have to fill in the questionnaire. LPS needs to know how much rent, if any, the charity pays. Exemption from rates is not affected by a revaluation.
Under The Rates (Microgeneration) Order (Northern Ireland) 2012, generation of electricity from renewable sources is not rateable where the capacity of the plant and machinery does not exceed 50KW.
Where installed capacity is above 50KW, Net Annual Value is assessed in line with Schedule 12 of the Rates (NI) Order, specifically by reference to the Receipts and Expenditure Method of Valuation.
There is currently no exemption from rates for renewable electricity generation other than those to which the 2012 Microgeneration Order above applies.