Background and Policy Objectives
3.A key feature of the non-domestic rating system is that valuations are based upon the net annual value of a hereditament (the property or part of the property which is liable for business rates). Net annual values (“NAVs”) are set by Land & Property Services within the Department of Finance and then appear on periodic non-domestic valuation lists published by the Commissioner of Valuation for Northern Ireland.
4.Business rate bills are calculated on the basis of this valuation list. The values in the list, broadly speaking, represent annual rental values, and are updated as part of periodic general revaluations. The most recent general revaluation for non-domestic property took effect on 1 April 2020. The next revaluation is planned for 1 April 2023 with a valuation date (or antecedent valuation date) of 1 October 2021.
5.The Health Protection (Coronavirus, Restrictions) Regulations (Northern Ireland) 2020 came into effect at 11pm on Saturday 28 March 2020, three days ahead of the publication of the new valuation list, specifying businesses that were either required to close or restricted in their operation. The Health legislation made provision for the purpose of enabling a number of public health measures to be taken to reduce the public health risks posed by the spread of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) in Northern Ireland which causes the disease COVID-19 (“coronavirus”).
6.Despite the necessity of the Health restrictions imposed by the Executive, the intervention of such restrictions just prior to the publication of a new valuation list means that new primary legislation is now required to mitigate the potential or significant associated loss to the overall net annual value of the non-domestic valuation list within the rating system.
7.This Act aims to mitigate the risk of potential challenges to aspects of valuations within a new non-domestic valuation list, brought on grounds of the public health measures implemented by the Executive, resulting from the operation of Article 39A of the Rates (Northern Ireland) Order 1977, and is intended to ensure that the adjustment operates in the context of both future non-domestic valuation lists and any pandemic that may occur in future.
8.The UK Government, alongside the devolved administrations in Scotland and Wales, has also announced and commenced legislative intervention so as to prevent challenges to net annual values being brought forward on grounds of Covid-19 health restrictions. This Act brings forward similar provision tailored to a local statutory context so as to address any potential loss of value in valuation lists and to adjust the rating system to prevent this situation arising again.
9.The UK Government also announced a supplementary £1.5 billion rate relief package to be implemented on a UK-wide basis. Access to that funding was contingent upon the successful passage of primary legislation at Westminster. It is the Department of Finance’s intention to ring-fence any associated Barnett consequential funding, upon successful passage of legislation, to ensure it is allocated to business ratepayers in the 2022/23 financial year.