Duty to Notify - Business Rates Compliance Obligations
- Jen Lemen
- 3 days ago
- 5 min read
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What is this blog about?
In this week’s blog, Helen Gelsthorpe BSc MSc MRICS, Associate Director at Avison Young UK Ltd, writes about upcoming changes to the business rates system.
Helen has over 14 years of experience working in the Business Rates Team within Avison Young’s Leeds Office. She deals with a wide variety of property portfolios on behalf of both private and public sector clients and has extensive experience of advising on and mitigating rates liabilities. She is also an RICS APC Assessor and Supervisor.
How does this link to my APC?
This article is closely linked to the RICS APC Local Taxation/Assessment competency because candidates are expected to know about the statutory framework surrounding business rates and how it impacts their clients.
The information is also relevant to the Data Management and Property Management competencies as the proposed reforms are likely to impact the way that property owners and occupiers manage and track their property information.
Introduction
Non-domestic rates are collected by local authorities and are the way in which those that occupy commercial property contribute towards local services. Business rates are forecast to raise £26 billion in the current financial year, and they make up a quarter of Local Authority core revenue funding. Whilst the current Government have made some bold claims about replacing the business rates system, it seems more likely there will simply be further reform of the current system.
The Non-Domestic Rating Act 2023
One of the most significant reforms is the introduction of a new ‘Duty to Notify’ via the Non-Domestic Rating Act 2023. The legislation became law in October 2023 and sets out several changes to the Business Rates System, some of which will fundamentally change the way that ratepayers manage their businesses.
The legislation will require all ratepayers to notify the Valuation Office Agency (VOA) of any change to a property they are responsible for within 60 days of the change. This includes any change to a property, tenancy or usage that affects rental value (or trade if the property is valued with reference to its receipts).
Previously, ratepayers weren’t obliged to proactively update the VO but were required to respond to requests for information. Under the new system, ratepayers will be expected to find out what their obligations are and comply, via an online platform, as is already the case for many other business taxes.
Events requiring reporting could include:
Physical changes
Addition of plant and machinery
Property vacancy or new occupation
Lease modifications including rent reviews and lease renewals
In addition, the Act introduces a duty to provide annual confirmation of the current information held by the VOA within 60 days of the 30 April each year. This duty will apply to the ratepayer or those who should be a ratepayer in cases where their property is not yet assessed, or their rateable value is zero.
Whilst the legislation is already in place, it is subject to commencement provisions as there is not yet a mechanism through which anyone can comply.
The Government has recently set out the following timeline for launching the Duty to Notify obligations:
It is intended that implementation will commence from 1st April 2026 but the rollout will be phased to ensure that it is adequately tested. The duty will be formally activated and mandated for all ratepayers by 1st April 2029.
Penalties
There will be penalties for failure to comply within the timeframe or for the provision of false information:
False data offences carry a maximum penalty of 3% of the rateable value plus £500. These penalties are applied per instance, so the VOA can issue multiple fines on a single assessment.
The VOA are also able to backdate increases in rateable value which stem from correcting false data provided by ratepayers.
If a ratepayer fails to comply with the duty to notify requirements, they will be precluded from Challenging their rateable values or requesting any valuation information from the VOA.
Whilst it has been confirmed that these penalty notices will not be issued until it is sufficiently straightforward for ratepayers to comply with the new obligations, there are already penalties for supplying incorrect information in a proposal to alter the rating list.
Alongside the duty to notify, a new digital gateway will be introduced to support data sharing between HMRC and billing authorities, as part of the government’s wider plans to link tax and property data. The aim is to provide central and local government with a more holistic view of businesses and to facilitate a more targeted design of business rates relief schemes in the future.
The bottom line - what are the key issues that you need to be aware of?
The new obligations are intended to increase the quantity and quality of evidence used to derive valuations, however, they represent a seismic shift in the administrative framework of business rates and a first step towards self-assessment.
The onus to provide information will be transferred to the ratepayer and business rates will be brought more in line with the compliance requirements of other business taxes. There has been much speculation as to when the changes will be rolled out, but implementing a phased introduction from the start of the 2026 rating list seems reasonable to allow for development and testing of the online platform.
Property owners and occupiers will need to ensure that they have systems or a designated person in place to comply with these new requirements, which could be a sizeable task for any organization with multiple properties or a dynamic portfolio.
If you would like to know more then please e-mail Helen.gelsthorpe@avisonyoung.com.
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N.b. Nothing in this article constitutes legal, professional or financial advice.