To ask the Minister of Finance whether he will consider reviewing the model used to calculate Net Annual Values for the hospitality sector as part of Reval 2020.

The statutory requirement on Land & Property Services (LPS) for Reval 2020 is to assess a Net Annual Value for all properties at 1 April 2018. All business rates are based on rental value. If the evidence of a rent isn’t available, different methods are needed to determine the rental value.

In economic sectors where there is limited direct market rental evidence, the established methodology for assessing the rental value is the Receipts and Expenditure Method. This is used in the valuation of, for example, cinemas, markets, petrol filling stations, quarries, utilities, hotels and pubs. The Receipts and Expenditure methodology is the established approach for these kinds of businesses agreed between professional valuation bodies such as the RICS and government valuation bodies in England and Wales and Scotland, as well as here.

The Receipts and Expenditure Method of Valuation for Non-Domestic Rating is used by LPS to value pubs and hotels because anyone considering renting a pub or hotel would want to know how it is trading. That is why valuers call for accounts and evidence of turnover. There are no plans to review the use of this methodology for the hospitality sector.