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The Non-Domestic Rating Act 2023 received Royal Assent on 26 October 2023.

The Act implemented various changes to the system of non-domestic rates (known as business rates) in England and Wales. Among the changes, it:

  • reduced the revaluation cycle for business rates in England from five years to three years
  • introduced a new duty for ratepayers to provide the Valuation Office Agency (VOA) with information about themselves and their business, and their ‘hereditament’ (the property or part of the property liable for business rates)
  • introduced a new duty for ratepayers to provide a taxpayer reference number to HMRC
  • established penalties for ratepayers who do not comply with those new duties
  • removed the effects of changes in legislation, regulation and guidance bodies from being accepted as grounds for changes in rateable value (“material change of circumstance”) between revaluations
  • introduced business rate relief for certain building improvements and for low-carbon heat networks

The Government set out a more complete outline of the measures in its explanatory notes to the Bill (pdf).

Background and extent

The Act mostly amends the Local Government Finance Act 1988, which is the legislative foundation of the current system of business rates. Most amendments from commitments made at the end of the Government’s Business Rates Review, which reported in 2021, or from the conclusions of the follow-up technical consultation. Those exercises had considered the business rating system in England.

Most of the provisions of the Act apply to England only. But some parts also extend to Wales on the request of the Welsh Government. Section 11 of the Act extends to Northern Ireland. The Act does not extend to Scotland.

Passage of the Bill

House of Commons

The Bill received its first reading on 29 March 2023 and its second reading on 24 April 2023, where it passed without division.

While many of the measures – notably the introduction of more frequent revaluations – received support across the House, many contributors to the debate regretted that proposals in the Bill were not more ambitious. There were also concerns about the potential burden that the new reporting requirements might put on ratepayers.

The Government acknowledged those concerns, but argued that more frequent revaluations would best be introduced gradually, and that they would in any event depend on more data collection.

Members considered various amendments to the Bill in a Committee of the whole House on 22 May 2023. With the exception of several technical government amendments, none were accepted. One amendment, proposed by Helen Morgan (Liberal Democrat) was unsuccessfully pressed to a division. It sought to remove the new annual reporting requirements from businesses receiving small business rates relief when there was nothing to report.

The House then moved to third reading and passed the Bill without division.

House of Lords and final stages

Contributors to the second reading of the Bill in the House of Lords on 19 June 2023 echoed the sentiments expressed in the Commons. Again, there was a particular focus on the new duties and the associated penalties for non-compliance.

Speaking on behalf of the Government in the Lords Second Reading debate and in Grand Committee on 3 July 2023, Baroness Scott emphasised that the new arrangements would not be introduced until piloting had shown that they worked for ratepayers.

The Bill passed both stages without amendment or division.

At report stage on 19 September 2023, though, the Lords agreed to government amendments that limited financial penalties for delays in providing information to the VOA and affirmed the usual burden of proof in tribunal decisions.

The Lords agreed the Bill without division at third reading on 16 October 2023. Members highlighted the importance of continuing to monitor the effect of the new arrangements.

The House of Commons in turn accepted the Lords amendments on 25 October 2023 and the Act received Royal Assent on 26 October 2023.

Further reading

House of Commons Library research briefing papers:

House of Commons constituency casework article:

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