Chester Louis Karrass
Business Rates are all a matter of negotiation.
Once instructed to act for a client our involvement does not end with a lease acquisition or building purchase. We take great care to ensure that all aspects of the occupancy from the administration of the service charge to the assessment of Rateable Value are correct. We have been involved in successful business rate negotiations for reduction of Valuation Office Rateable Value assessments for a wide range of owners and occupiers including E&O Properties Ltd and L’Ecole Internationale Franco-Anglaise Ltd (D1 education premises).
Business Rates are a tax on your occupied commercial property and as a rule equate to approximately half the annual rental attributed to your net lettable area occupied.
Business Rates are made up of two elements as follows:
i. Rateable Value – defined as a rental value attributed to your demise (or hereditament) at a specific date usually two years’ prior to the set date for revaluation (the April 2017 revaluation RV’s are based on rental values of April 2015). The Valuation Office Agency (VOA) sets the Rateable Value on which your business rates are based.
ii. A Multiplier (Poundage in Scotland) or “the national non-domestic multiplier” which is set by central government for the whole of England and is effective from 1st April each year. The multiplier represents the number of pence in each pound of the Rateable Value that will be payable in business rates, before any relief or discounts are applied. The calculation gives the amount of rates payable for the year. The government reviews and sets the multiplier each year to reflect changes in inflation.
The revaluation in April 2017 could bring about disproportionate increases due to high levels of rental growth in some areas of London over the years leading up to April 2015, the date upon which the new RV’s are based.
Business Rates are one of the largest overheads for businesses in London and as a result have a major impact on profitability. As a result It is important to take great care in ensuring that you do not overpay unnecessarily.
The next UK business rates revaluation will come into effect on 1 April, 2017 with Rateable Values based on rental levels of 1 April, 2015. The last business rates valuation was in April 2010, based on rental rates of April 2008. The market conditions of 2008 were very different to those being applied for the 2017 revaluation.
At revaluation, all properties are given a new Rateable Value and the multiplier is revised accordingly.
To ensure that your valuation is accurate, contact MB&A Commercial. We can make a market assessment of the value applied to your offices and challenge or appeal the Rateable Value applied on your behalf if appropriate.
The deadline for rating appeals is 31st March, 2017.
What will your outgoing be from April 1st, 2017?
Will it increase and, if so, can that increase be limited?
The Draft 2017 Rating List has now been released and represents the largest shift in range of Business Rates in modern times.
The greatest effect is on the larger businesses in London which could face a revised business rates liability of up to 45% from April. The London office sector is now suffering for the success of the economy between 2010 and 2015 and the underlying rental growth that went with it. Shortages of office supplies over those years combined with fierce levels of productivity created an unparalleled rental growth spike leading up to the designated date for the 2017 Rateable Value assessment (April 2015). In some locations such as the West End and City markets this could lead to excessively increased BR outgoings subject to transitional phasing limitations that are yet to be announced.
Business Rates are a big deal. This is a complicated tax and as a result occupiers tend to miss opportunities for reduced liability.
We can review, report on and assist in negotiating an optimum level focused on your situation and drawing from caste experience of dealing with the valuation Office and local authorities as well as research undertaken into the new and old listings.
There are a number of important steps a business can take to ensure that it is paying the correct amount and is not overcharged. Most of the information will be found on the live rating assessment entry for the property available on the Valuation Office Agency’s website.
In order to qualify for a potential business rates reduction one needs to:
Check the rateable value – remember it is the Valuation Officers opinion of properties’ annual rent – is it correct? Check the summary valuation attached to your rating assessment entry in the rating list. Are the net lettable areas correct, for instance?
i. Look at the valuation reference scheme number used and check if it matches the age / specification / location of your property.
ii. Do you have any vacant space within your demise that could be “de-rated”? Listed buildings, and parts of, can be exempt from paying rates if held under a separate hereditament.
iii. Do you qualify for exemptions and/or reliefs for business rates?
iv. Look for successful appeals within the designated scheme to see if any have been successful.
v. If your business is effected by a change in the locality such as a road closures and/or building works then there maybe scope to secure a temporary business rates reduction.
vi. You only have one right of appeal so contact the Valuation Office first with reasons why you think the assessment is too high.
Have a professional rating specialist take a look at your situation and assess the probability of a reduction. We work on a success related fee so there is no cost to you unless a successful outcome has been secured.
We have a track record in helping our clients contest and successfully appeal business rates and have secured large rebates as well as reduced Rateable Value levels. Contact us for help and advice when it comes to reducing business rates.
I would be very happy to undertake a full audit and provide recommendations on where we can save you money.
Please use the form below for any queries you may have or call me on 0207 118 3456.
Sign up to our newsletter to receive regular property updates and acquisitions.