On 30th September 2016 the government published a new list of rateable values for properties throughout the country. For Commercial Properties, this will mean a change to their business rates.
The amount of change will be affected by the area in which the business is situated, and more specifically the property prices in that area. For example, areas of England and Wales where the property prices are high, such as London and the South of England, will find that the new rateable values means their business rates will increase. Conversely, businesses in areas with lower property prices will be responsible for paying a reduced business rate once the new values are brought fully into force.
Rateable values are primarily calculated using the value of the property but other things, such as the value of equipment and the overall value of that business’ sector, are also taken into account. The government then set a figure each year which is applied as a multiplier to each property to determine the overall business rate.
The rateable values are supposed to be determined every five years, using the value of the relevant property from two years previously (although the valuation last year was postponed for two years to avoid altering the values too severely).
The new values will come into effect on 1st April 2017, using property values taken from 1st April 2015. The rateable values will stay in force until 31st March 2022 (unless the government decide to postpone the next valuation again).
As business rates are calculated per business, the effect will vary depending on, primarily, the value of the property. This could mean a serious impact for those businesses in the highest bracket of property prices, as their expected outgoing for business rates will be set to rise dramatically. On the other hand, though, the new rateable values could strongly assist businesses who operate out of properties in the lower price range, which will see a decrease in the amount they will have to pay for business rates.
There are a number of reliefs and exemptions available that are designed to help smaller businesses and other businesses that are caught by the obligation to pay business rates but are not required to, such as farm buildings or farmland, which is exempt, or charity-run businesses, which may be entitled to up to 80% relief.
If you do not agree with the rate applied to you or your business, you have a right to appeal. The actual system for doing this is still being finalised, however you will only get one opportunity to appeal on any ground, so it is important to ensure you have thoroughly checked all details before you begin the appeal process.
If you have any questions, please do not hesitate to get in touch with a member of our Commercial Property Department on 0116 289 7000.
This post was originally posted on bhwsolicitors.com on October 2016
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