Growth and Infrastructure Bill

Memorandum submitted by Dalton Warner Davis (GIB 58)


Dalton Warner Davis is a City based firm of chartered surveyors and property consultants, providing a broad range of property consultancy services to a wide range of national, international organisations as well as private individuals. We are one of the leading business rates advisory practices representing ratepayers in England, Scotland and Wales, across all categories of property.

We are writing setting out our representations against the Government’s stated intention to postpone the 2015 Rating Revaluation. We most strongly urge that Clause 22 should be removed from the Bill. We summarise our principal reasons for this as follows:-

1 In the Government’s own words, the purpose of five yearly Revaluations is to "make sure that ratepayers pay their fair contribution and no more". Postponement of the Revaluation fundamentally contradicts this. Rating Revaluations address shifts in value patterns, thereby ensuring that businesses in struggling locations and where there have been falls in rental values, do not subsidise those in areas which have experienced positive rental growth.

2 The Government states that by postponing the Revaluation, businesses will avoid facing unexpected hicks in rates over the next five years. As rates are linked to inflation, there will be no increase in real terms over this period and that this reform will provide certainty for business to plan and invest, supporting local economic growth. The reality is that businesses, specifically those in struggling areas, require a reduction in their business rates, not the certainty that they will continue to pay rates at inflated levels.

3 The purpose of Rating Revaluations is to achieve fairness of tax liabilities by ensuring rateable values are based on up-to-date rental values and therefore to re-distribute liability in line with relative movements at property value since the previous Revaluation. This means that Revaluations do create winners and losers. Delaying the Revaluation creates unfairness by requiring struggling businesses to subsidise that have faired relatively better.

4 Research undertaken by the Government into the likely impact of the 2015 Revaluation differs starkly from that undertaken by the property industry and we believe it is based on flawed assumptions/data. National taxation policy should not be imposed without consultation and a proper full impact assessment.

5 Postponement of the 2015 Revaluation is completely contrary to recommendations contained in The Lyons Review, as reported in March 2007. Research undertaken by the property industry suggests a Revaluation in 2015 would have resulted in a fall in the total rateable value of approximately 10%, reflecting movements in rental values since April 2008 (the antecedent valuation date for the 2010 Revaluation). This assumes that the valuation date for the 2015 Revaluation would be April 2013. This 10% fall in value is less than the Valuation Office Agency’s estimate of 13%.

6 We seriously question the Government’s claim that based on the VOA’s estimates, there would have been 800,000 losers from a 2015 Revaluation and only 300,000 winners.

We conclude as follows:-

1 The 2015 Revaluation should proceed as planned with future Revaluations at intervals no less frequent than five yearly.

2 The data supplied to-date by the VOA is unreliable and cannot be relied upon.

3 The announcement to postpone the Revaluation is a knee jerk reaction, based on political expediency rather than the potential impact on hundreds of thousands of ratepayers. The shift in the incidence of liability as a result of a Revaluation can easily be cushioned by a transitional scheme, yet there has been no mention of this in the Government’s statement.

4 The lack of an "in-depth" explanation has been mirrored in the Adjournment Debate in Parliament, which leaves considerable doubt as to the research carried out before the decision was made.

5 The nature of the decision leads to the inevitable conclusion that the alternatives to postponement have not been fully explored before the announcement was made.

6 The need for Revaluation in changing and volatile times is more urgent rather than less. We are extremely concerned that the fairness of the system is apparently being undermined by political expediency.

December 2012

Prepared 10th December 2012