The Government has just announced that subject to Parliamentary approval, the new Uniform Business Rate (UBR) for 2010/11 will be set at 41.4 pence in the pound for large properties (RV under £18,000 outside London) and 40.7 pence in the pound for small properties. These UBR's represent a reduction of around 15% from the current UBR's of 48.5 pence in the pound and 48.1 pence in the pound. The small business rates supplement is increased from 4 pence to 7 pence in the pound for 2010/11.

The Government has also announced a new scheme to phase in rates increases and decreases, which unlike the current system which was phased in over 4 years, extends phasing for the entirety of the 5 year Rating List lifespan, as follows:-

All of the above phasing limits are subject to adjustment for inflation, which for 2010/11 is based on the September 2009 RPI factor of minus 1.4%.

As you can see from the table above, small properties are much more favourably treated for phasing purposes than large properties and as a result, small properties will see much smaller rate increases over the five year lifespan of the Rating List with maximum increases limited to 64% plus inflation, whereas for a large property, the maximum increase is 147.8% plus inflation. Similarly, a small property subject to downwards phasing will reap the benefits of a reduced bill much faster than a large property with the downwards limit for small properties over four times the size of that for large properties for 2010/11. With a similar pattern over the four other years of the five year lifespan of the Rating List, large properties subject to downwards phasing will bear the brunt of subsidising those properties subject to upwards rates phasing.

As in previous years, the new transitional provisions will have a significant distorting effect upon most business's rates liabilities, and with the Government estimating that over a million properties will be entitled to reduced business rates liabilities for 2010/11, it is disappointing that for companies occupying relatively modest properties, but still classified as large properties for the purposes of transition, (i.e. with 2010 RV over £18,000) it will take some many years to enjoy the benefits of the rates reduction they should be entitled to, now!

Now that these figures have been announced by the Government, albeit subject to Parliamentary approval, we urge businesses to take professional advice in preparation for next Rates Year as there may be action which can be taken now to enable a company to minimise or avoid the impact of the transitional surcharge provisions from 2010/11 onwards.

Other recent amendments include a reminder that ratepayers who have claimed Small Business Rates Relief under the 2005 Rating List will need to reclaim for this relief under the 2010 Rating List. The qualifying thresholds have also been increased and relief now applies to properties with an RV of £12,000 or less (from 1/4/2010). Applications can be submitted to Local Billing Authorities from October 2009 onwards.

Further information on the 2010 Rating Revaluation is available as a free download from Thompsons' website, www.thompsons-cpc.co.uk, which includes an action checklist. Thompsons follow the Rating Consultancy Code of Practice issued by the RICS/IRRV/RSA.

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