Determinations in respect of certain non-domestic rating lists
Liability for non-domestic rates (known as business rates) is based upon the rateable value of the hereditament (the property or part of the property which is liable for business rates). To be assessed as a hereditament a property must meet a number of tests established by case law including that it is capable of beneficial occupation. 1 Rateable values are set by the Valuation Office Agency and appear on non-domestic rating lists. There is a rating list for each Billing Authority and also a Central Rating List held by the Secretary of State (typically containing network hereditaments which span many billing authority areas).
	Business rate bills are calculated from rateable values which, broadly speaking, represent annual rental values. These rateable values are updated at general revaluations - the most recent being in 2017 when rateable values were based on the rental market value at 1 April 2015 (known as the valuation date). The next revaluation is planned for 1 April 2023 with a valuation date of 1 April 2021.
	It is at these general revaluations that the rateable value of a hereditament, and therefore rate bills, are updated to reflect changes in economic factors, market conditions or changes in the general level of rents. Between revaluations the determination of whether something is a hereditament and their rateable values can only be changed to reflect "material changes of circumstances" including, for example, physical changes to the property or the locality. Since the start of the coronavirus pandemic, the Valuation Office Agency has received a large number of checks (a prerequisite to challenging rateable values) arguing that interventions concerning the use of property (such as requirements to close businesses or to maintain social distancing to comply with health and safety legislation) are a material change of circumstances. If successful, these checks and subsequent challenges may impact hereditaments shown on the rating lists and the level of rateable values across a wide range of properties, sectors and regions ahead of the next revaluation.
	Matters such as the impact on rental values of coronavirus or interventions in response to coronavirus are part of the general market conditions and, as such, should where necessary be reflected in updated rateable values at each revaluation. If it were otherwise, the Valuation Office Agency would have to constantly reassess all hereditaments and rateable values with every coronavirus-related intervention or change in intervention regarding the use or enjoyment of property or the locality.
	The Government does not believe that changes to rateable values through challenges to the rating list or the removal of hereditaments from the rating list is the right mechanism to help businesses that need support during the pandemic. On 25 March 2021 the Government therefore announced that they would introduce primary legislation with retrospective effect to clarify that coronavirus and the Government’s response to it is not an appropriate use of the material change of circumstances provisions. 2 The Government has instead provided support to ratepayers affected by coronavirus through business rates relief.
	During the passage of the then Bill through Parliament, the Scottish and Welsh Governments announced their intention to make corresponding provision in respect of Covid-related business rates appeals. The Government, at the request of the Welsh Government, tabled amendments to the Bill at Commons Report stage to extend application of Section 1 to non-domestic rating lists compiled for the purposes of business rates in Wales (as well as lists for England).