The Department for Levelling Up, Housing and Communities and the Treasury have announced changes to Business Rates in the UK. The reforms are designed to incentivise property improvements and support more frequent revaluations

Last Wednesday, a new bill was introduced following a 16-month long consultation investigating the business rates review in 2020. The Non-Domestic Rating Bill, which will be debated in parliament in due course, is a modernisation of the current business rates system. 

Under the proposed legislation, valuations of business rates will take place every three years, not five. By increasing the frequency of these rateable value reviews, businesses facing falling values will see their bills drop sooner. This will prevent firms from paying rates that do not reflect the true value of their property, specifically in time of market fluctuation. 

‘Businesses have asked for changes to the business rates system and we are acting,’ starts Victoria Atkins, Financial Secretary to the Treasury. ‘… More frequent revaluations make the system fairer and more responsive.’

In addition, businesses making eligible building improvements will not face higher business rates bills for a year. This measure encourages investment as it provides tax breaks for business owners extending or upgrading their properties. 

Recent data, published by the Local Data Company, highlights that beauty salons and nail salons ranked in the top 10 fastest-growing retail categories on UK highstreets. And, the number of barber premises witnessed an average net increase of +224. 

Knowing the value, and success, of beauty destinations on UK high streets, the British Beauty Council and other industry stakeholders encouraged this business rates reform. The organisations called for not only more frequent revaluations but also the extension of tax reliefs for improvements in the initial consultation. 

On the announcement, Victoria Brownlie, Chief Policy Officer at the British Beauty Council said: ‘The Non-Domestic Rating Bill is definitely a step in the right direction during this recent period of sustained crisis, when we need to protect businesses, livelihoods and jobs. Looking forward, the measures introduced within the Bill will help businesses make positive changes to their businesses in terms of property improvements, adding value and future-proofing them for the years to come.’

Despite these positive measures, the Bill neglects to realise the possible advantage of introducing incentives for those engaging with more sustainable practices. 

The Council continues to engage with the Government to encourage the introduction of environmental, social, and governance grants for business owners. In its most recent Spring Budget, the Council called for the introduction of green grants, interest free loans, and incentives for commercial premises to transition to clean or renewable energy. It also requested incentives around emissions reducing measures within business to help reduce energy costs and make the necessary shift towards net zero.