Unravelling business rates
Tiffany Wan, a solicitor specialising in commercial property at Edwards Duthie Shamash, on what’s all the fuss about business rates.
Why are business rates such a hot topic at the moment? My local butcher was saying the other day he might have to shut up shop because of them.
What’s going on?
Business rates, which are collected by the local authority are chargeable on all nondomestic properties such as commercial shops, warehouses, business offices and factories. These rates are collected by the local authority.
For each premises the rate is calculated in accordance with the “rateable value” set by the Valuation Office Agency (VOA); this is normally revalued every five years, however, this was slightly delayed due to the economic downturn and to allow for a period of stability for business owners.
On September 30 2016 the government released new rateable values to be used from April 1 2017. This has been met with much hostility. Reportedly some retailers, particularly in the south-east region of England, have seen rate rises of up to 400 per cent. In light of such hikes in prices, Helen Dickson from the British Retail Consortium presented the view that business rates were simply “not fit for purpose in the 21st Century”.
If a company has concerns about the effect on its business of such dramatic increases it should make an appeal while simultaneously seeing if it is eligible for relief.
For a business seeking a revaluation, an appeal can be requested from the VOA and this can be further challenged at a valuation tribunal if required. It is recommended that a business making such an appeal engage a surveyor specialising in rates revaluations. Most reputable firms will offer their services on the basis of payment of a proportion of the savings achieved, without any substantial payment in advance.
A business can get small business rate relief if its property’s rateable value is less than £15,000 and its business only uses one property. Councils can also reduce a business rates bill with hardship relief To be eligible, a business must satisfy its council that it would be in financial difficulties without it and giving hardship relief to the business is in the interests of local people.
The good news is that there are transitional arrangements to help companies adapt. The transitional arrangements will limit the amount that bills will increase each year, offering a financial cushion in this initial period.
Article by westessexlife.co.uk