Commerical chartered surveyor Charlotte Luckett examines business rates

If you have a non-domestic property, you will have noticed that your rates may have risen, which, reflecting the economic climate over the last 18 months, could be another blow for some small businesses or even a final nail in the coffin.

The reason why your rates may have risen is because from 1st April 2010 the rateable value for all non-domestic properties was altered.

What is a rateable value?

All non-domestic properties have a rateable value drawn up and maintained by the Valuation Office Agency (VOA).  This broadly represents the yearly rent a property could have been let for, on the open market, on a particular date according to the VOA’s opinion based on evidence they have collated from occupants of non-domestic properties.  For the re-valuation that has just come into effect, this date was set as 1st April 2008, and is known as the ‘antecedent date’.  The rateable value of your business property will show on the front of your bill.  

Can I see a list of rateable values?

Yes, you can check yours and rateable values of all non-domestic properties in the country at www.voa.gov.uk  

How often are rateable values reviewed?

The Valuation Office Agency re-values all non-domestic properties every five years at a general re-valuation. The current rating list is based upon the 2010 re-valuation and has just come into effect.  

Five yearly re-valuations make sure that each rate payer pays their fair contribution and no more, by ensuring that the share of the national rates bill paid by any one rate payer reflects changes over time in the value of their property relative to others.  

While the 2010 re-valuation will not increase the amounts of rates collected nationally, some rate payers will see an increase.  

The next re-valuation is due in 2015.  

What if there is a change that may affect the rateable value?

The rateable value of your property may change if:

1. You physically alter your property and increase or decrease the amount of floor space

2. All or part of your property is used for a different purpose (for example, from storage to retail)

The Valuation Officer will then re-value your property and may change the rateable value. 

If there is less floor space in the property and the Valuation Officer has agreed to re-value it, the Council may be able to agree a temporary payment arrangement based upon a lower rateable value. 

There is also an opportunity to contest the actual rent the VOA considers the property could attract.  This is especially important in the market we are current experiencing where there are many incentives being offered, such as rent free periods, etc. Specialist advice could be required to improve the success of such a contest.

Can I appeal against the rateable value?

You (and anyone who has an interest in the property) can ask for a change in their rateable value.  You can do this if you think the circumstances of the property have changed, or if you think that the rateable value is incorrect.

It does not cost you anything to appeal against the rateable value.  You do not need to have a Rating Adviser to represent you in your appeal.  However, it can work both ways.  If the VOA consider that you are not paying enough, the rateable value could increase.  

If you would feel more confident in using a specialist, there are surveyors who are Members of the Royal Institute of Chartered Surveyors (RICS) qualified to do this and regulated by rules of professional conduct.  It is important to ensure that the surveyor has the necessary knowledge and expertise, as well as appropriate indemnity insurance before you employ them.

Do I have to pay if I have appealed against the rateable value?

Yes, you are legally obliged to keep paying your business rates based upon the current rateable value of your property while your appeal progresses.  

If you do not pay your bill until the appeal has been heard, the Local Authority can take legal action to recover any unpaid rates.

What happens if the rateable value changes?

If the Valuation Officer changes the rateable value of your property, or if your appeal is successful, the Valuation Officer will inform you and the Council about the changes made.  The Council will then re-calculate your account based upon the new rateable value and will then refund any over-payment plus interest if your rateable value is reduced.  

It is imperative that you continue to pay your business rate instalments by the dates shown on your bill, otherwise the Council will be able to take action to recover the money and you will lose the right to receive interest on any over-payment.

BUSINESS ACTION:

1. Go onto www.voa.gov.uk and find out your rateable value.

2. Compare it to the 2005 Rating List.

3. If it has increased drastically consider appealing.

4. Obtain professional advice if unsure.

5. There are companies claiming to be ‘experts’, so beware!!

6. MRICS or IRRV are the qualifications to look for.

Charlotte Luckett is a commercial chartered surveyor, acting as a Consultant for Underwoods Surveyors LLP. 

t 07854 368 067
e charlotte@underwoodscs.co.uk