Consultation on a technical adjustment to the Business Rates Retention System in response to the 2023 Revaluation and Central List Transfers

Overview

The Business Rates Retention (BRR) system distributes tax income between councils, and between councils and central government, according to need and established shares.

Separately, the next Business Rates Revaluation is due to take effect from 1 April 2023, changing business rates income retained locally. The Government has also confirmed its intention to move a number of large telecom networks and the Channel Tunnel Rail Link out of local authority rating lists into the central rating list from 1 April 2023. Moving properties to the central list will reduce income at local authority level.

It is government policy that retained business rates income from the BRR system should, as far as practicable, be unaffected by either Business Rates Revaluations or the announced movement of ratepayers from local lists to the central rating list at the 2023 revaluation.

In 2017, the first technical adjustment was made to the BRR system which intended to neutralise the effects of the last Revaluation. This consultation seeks views on minor updates to the 2017 technical adjustment methodology to better reflect changes in local authority income resulting from the Revaluation and additionally, for the first time, to mitigate losses in income resulting from central list moves.

Why your views matter

This consultation is an important step in the development of a technical adjustment to the Business Rates Retention system in response to the 2023 business rates revaluation and transfers from local lists to the central list. Responses to this consultation will help inform advice to ministers on proposals.

We particularly welcome views from Local Government, Local Government representative groups and sector experts.