The Government has recently published a consultation on digitalising business rates (DBR).  The aim is to allow taxpayers to access their tax and business rates information in the same place online –  an objective of the government, as stated in their Business Rates Review published at the Autumn Budget in 2021.

Their aims are to:

• match business rates data with central HMRC tax data
• display business rates information alongside other tax information in a standardised way

The consultation paper is seeking views on the design of the new system and also on how it could operate.  It also confirms that it won’t be delivered any earlier than 2024, and is more likely to materialise between 2026 and 2027.

The idea is that it will help taxpayers in being able to refer to a single source for general taxation and business rates information.  This will, the government claims, lead to greater transparency of the business rates liabilities of businesses.  It also claims it will be easier for local billing authorities, who collect business rates, to be able to support individual businesses through targeted reliefs where appropriate.  The actual billing and collection of business rates is not expected to change as part of this process.

Needless to say, there will be an obligation on ratepayers to interact with the system to set it up in the first place.  A number of options are being considered, broadly summarised as follows:

Option A (lead option): The government has already announced a future ‘self-declaration’ duty on ratepayers to notify the Valuation Office Agency (VOA) of any tenure changes (rent review, lease renewal, etc) or physical property changes.  An additional one-off step could be added to the VOA’s new duty processes to gather the tax reference number(s) for DBR data matching and pass them to HMRC to validate.  It is felt that this could offer a ‘good customer journey’ without placing significant additional burden on the ratepayer.

Option B: Requesting ratepayers provide tax reference information to their Billing Authority (BA).  The BA would then pass this to HMRC to validate and match to the ratepayer’s tax information.  This would negate any interaction with the VOA, but would impose a burden on BAs to have to comply efficiently with the system themselves.

Option C: Requesting property reference numbers as part of a tax-related service.  This would require ratepayers to log on to HRMC’s online services and complete a process to provide references for each of their properties, which would then be linked to their tax reference(s).  This would avoid interaction with either the BA or the VOA, but would be a duplication of the process of registering for the forthcoming VOA’s new duty processes.

Behind any of these obligations on ratepayers is a penalty system whereby fines can be issued for non-compliance, whether intentional or in error. As with many consultations, it appears that the government is committed to this journey, but it is the methodology and the processes which it is interested in gauging opinion on.

Undoubtedly, in these days of more and more compliance and obligations on business owners, having as many tax affairs available to be viewed and interacted with in a single place has to be attractive, but how much of a benefit will it actually be to business owners and how difficult will it be to ensure compliance with all aspects, particularly with the risk of fines hanging over them? 

David Gale-Hasleham of Savills, who advises the NCC, comments: “There is concern about the ability for local billing authorities to be able to access business information, which would be helpful when seeking to target business rates reliefs, but could be of concern in terms of sensitive information being more readily accessible outside of HMRC.

“Another issue which could cause complications will concern the structure of a business, for example where the entity that pays the business rates for a property is different from the one which trades from that property.”

The NCC is keen to provide an opinion on behalf of its members.  In particular they are interested to know members’ views on the following questions:

• How useful would you expect the DBR service be to your business?
• Would you like to see the DBR system extended in the future to allow you to pay business rates through it as well?
• Do you perceive any difficulties for your business where the business rates paying entity is different to the trading entity?
• Which of the above customer journey options (A, B or C) would you favour and why?
• Would any of the customer journey options be particularly challenging?
• Do you have any views on the proposed compliance and penalty regime?
• Do you have any concerns about the availability of data to other parties, including local billing authorities, the VOA or appointed agents?

It should be appreciated that the basis of how a caravan park should be assessed was established by Statute by the Rating (Caravans Sites) Act 1976 and is peculiar to the industry and by inference does not include income received from pitch fees or caravan sales – under the proposals this could change.

The consultation period closes on 30 September, so please email any comments or opinion to policy@thencc.org.uk before then.

The NCC is grateful to Savills for assistance with this article.