Headlines: January 14th, 1999

The Government has announced its intention to seal a loophole that threatened turmoil for the country’s business rates system.It is amending the Local Government Finance Act 1988 after a land tribunal decision last March that the state of property should be taken into account when taking a valuation.

The decision threatened both revenues from the country’s business rates system, and also to throw the process of valuing property into disarray.

Local Government Minister Hilary Armstrong said that if left unamended, the tribunal’s decision would lead to severe practical difficulties with the administration of the system and risk significant loss of rate income.

Non-domestic properties are valued every five years on a common date. Re-valuations are based on the assumption, derived from long-standing case law, that the property is in a reasonable state of repair.

Allowed to continue unchecked this would have meant businesses could appeal against their valuation as their property condition changed. It would also have meant a much more thorough valuation would have been required on the next scheduled re-valuation in 2000.

The Rating (Valuation) Bill will apply retrospectively and to all future valuations. It will not apply to the test case that led to the change, or similar cases which were already active at the time.