Reval 26 Halt Sparks Legal Challenge in NI

Reval 26 Pause Sparks Legal and Political Debate

A major disagreement over business rates reform in Northern Ireland has placed Finance Minister John O’Dowd in a difficult position.

The minister recently announced a pause in the Reval 26 revaluation process, a move initially welcomed by pubs and hotels facing steep rate increases. However, the decision has now triggered criticism from other sectors, particularly the cinema industry.

The revaluation process, which updates the rateable value of commercial properties, is designed to ensure fairness in the business rates system. Critics argue that halting it could undermine that principle.

Cinema Chain Omniplex Launches Legal Action

Northern Ireland’s largest cinema operator, Omniplex, has begun legal proceedings in response to the pause.

According to the company’s managing director, Paul Anderson, 13 of its 15 cinemas were set to benefit from lower rates under the draft Reval 26 outcome. The company estimates it could have saved nearly £500,000 annually.

Anderson claims that while hospitality businesses represent a small portion of ratepayers, their concerns received disproportionate attention. He stated that pausing the reforms benefits only a limited group while negatively impacting many others.

Omniplex has issued a pre-action legal letter to the Department of Finance, seeking to compel the minister to proceed with the revaluation process.

How the Business Rates Revaluation Works

Revenue-Neutral System Explained

The business rates revaluation process takes place every three years and is revenue neutral. It does not aim to raise additional money but to adjust how the total tax burden is shared among businesses.

Each property’s bill is based on its Net Annual Value (NAV)—an estimate of what it could reasonably be rented for at a fixed point in time. This value is then multiplied by the “rate in the pound” to determine the final annual charge.

The goal is to keep property valuations aligned with current market conditions and ensure a fair and balanced taxation system.

Impact of Reval 26 on Different Sectors

Hospitality Sector Facing Sharp Increases

Under the draft Reval 26 results:

• Hotels faced an overall valuation increase of 84%

• Pubs saw a rise of 47%

• Industrial and warehousing properties increased by about 16%

According to Land and Property Services, these changes reflect stronger post-pandemic trading conditions and property upgrades.

The hospitality sector argued that the increases would have placed serious financial strain on businesses, potentially leading to higher prices for consumers.

Hospitality Industry Welcomes the Pause

Industry representatives, including Hospitality Ulster, expressed relief after the minister halted the reforms.

Chief Executive Colin Neil said members had lost confidence in the valuation system and feared the rate hikes could have severely damaged the sector.

The minister stated that the pause was intended to ensure the rates system remains fair and equitable for all businesses, while also allowing time for constructive discussions.

Concerns Over Fairness and Legal Uncertainty

However, some officials warned that delaying implementation could create inequality.

Sharon Gallagher, head of Land and Property Services, previously told Stormont’s finance committee that pausing Reval 26 might be unfair to businesses that would benefit from lower rates.

Minister O’Dowd defended his decision, saying any tax system will create winners and losers, but fairness must remain the foundation of the process.

What Happens Next?

Omniplex’s legal challenge is now underway, though no court date has been announced. The company hopes for a swift resolution before new business rates bills are issued in April.

The dispute highlights the broader tension between supporting vulnerable sectors and maintaining a transparent and consistent tax system. As the situation develops, the outcome could shape the future of commercial property taxation in Northern Ireland.