In the past 18 months, more than 5,000 steel jobs have been lost, with major events including the collapse of SSI in Redcar, Caparo going into administration, and Tata putting its UK operations on the block. Britain’s steel industry remains in crisis as it buckles in the face of competition from state-subsidised Chinese imports, high energy costs and a less favourable property tax regime than enjoyed by European rivals. Steel industry bosses and unions have long warned that a toxic mix of high business rates, rising energy and environmental costs, and the lack of a state-backed industrial policy are threatening Britain’s much-vaunted manufacturing renaissance. So will the recent business rates revaluation help the situation? The Government has now adjusted the Rateable Values of every business property in England and Wales to reflect changes in the property market. The new Rateable Value will be used to determine the basis of the tax calculation for rates next April. The revaluation of business properties usually happens every 5 years but was controversially delayed by 2 years as a result of the economic downturn. The last revaluation came into effect on 1st April 2010 based on the property market as long ago as 1st April 2008. What is a business rates revaluation? The purpose of a business rates rating revaluation is to achieve fairness by ensuring that tax liabilities are based upon up-to-date rental values. As a consequence, revaluations create ‘winners’ and ‘losers’ as ratepayers’ liabilities are shifted in line with relative movements in property values since the previous revaluation. Those whose properties have performed better than their peers – by dint of the quality of their property, location or business sector – since the previous revaluation can expect to see their bills rise. Equally, those whose properties have underperformed can expect to see their bills fall. Business rates for construction sites in Wales set to fall by over 20% In Wales, where property taxes such as business rates are devolved, the Welsh Government has signalled that there will be no cap on downward tax movements, i.e. no transitional relief scheme, other than for those ratepayers whose eligibility for small business rate relief is affected as a result of the revaluation of properties. The upshot is that the Steel industry in Wales will see the full and immediate benefit of falling rateable values next year. According to CVS business rates specialists, Tata Steel at Port Talbot has seen their property assessment fall from £20.9m to £16.88m- a 19% drop.  This year the site paid £10.16m in business rates but, from April next year, CVS projects that will drop to £8.42m. CVS surveyors also suggested that across the 5 main Steelwork sites in Wales, rateable values have fallen from between 16% to 29%, and the total rates payable, i.e. the business rates bills, will fall next April by a quarter from £16.64m to £13.26m. However, in England, the picture is very much different. Transitional Relief in England The problems caused by 5, and recently 7, yearly revaluations are aggravated further for some by the impact of Transitional Relief. The Transitional Relief scheme exists to cushion and phase in increases in bills for those ratepayers who would otherwise see significant increases in their rates liability. This relief is paid for in part by limiting the amount that bills can fall for ratepayers who would otherwise see a significant reduction. Under the scheme, limits continue to apply to yearly increases and decreases until the full amount is due. The Government has issued a consultation on a new transitional relief scheme for implementation of the 2017 revaluation, with two options indicating that option 2 is their preference. Therefore, in England, unlike Wales, a downward cap will apply to large reductions in rateable values for Steelworks and any large business. In year 1, Steelworks and large businesses will effectively be limited to a 4.1% downwards cap. The outlook for construction in England England’s largest steelworks in Scunthorpe has seen its rateable value plummet from £26.66m to £22.48m, a 16% drop. This year the plant will pay £13,250,020 in business rates but next year, without any downward cap, that would be £10,790,400 say CVS business rates specialists. However, the Government’s downward cap means next year the bill will only fall marginally to £12,889,379. Across the 10 main steelworks still remaining in England, CVS says rateable values have fallen by 17.57%, and if no downward cap was in place, as in Wales, they too would similarly save a quarter on their rates next year ; equating to 20.39% or £5.35m. The consequences of the 4.1% downward cap, say CVS, is that steelworks next year will only actually see a drop in real terms of 4.37% in their actual rates payable and only save £1.14m, £4.2m shy of what they would have saved if no transitional relief was applied as in Wales. Conclusion The revaluation in England and Wales of steelworks is undoubtedly good news. Rateable values have fallen. However, given the position of devolution of rates, and a very different position taken by the Welsh Government and Department for Communities & Local Government on how to deal with the volatility, the unintended consequences is to create a far more lucrative property tax incentive in Wales at the expense of their English counterparts. Mark Rigby, CEO of business rates specialists, CVS says; “Welsh steelworks will pay a quarter less in business rates next year as a result of the revaluation, saving the sector £3.38m across the 5 main plants. “Steelworks in England however, have seen rateable values drop by 17.57% on average, but given the effects of transitional relief, their overall bills will only fall by 4.37%, meaning their savings are £4.2m shy of what they should be. “If they were comparable to their Welsh counterparts their bills overall would fall by 20.39%. “The stark contrast here is frankly unbelievable for a sector in such crisis. “The Prime Minister’s new administration is signalling a willingness to think differently on economic