What are Business Rates?

Business Rates (also known as National Non-Domestic Rates) are a tax on business properties. The tax is set by the government with business rates collected by local authorities and are the way that those who occupy non-domestic property contribute towards the cost of local services.

How does it work?

There are two principal factors which contribute to the rates bill received by every ratepayer: the Rateable Value (RV) of the property, which is set by the VOA in England/Wales and The Assessor in Scotland; and the Business Rates Poundage (or Non-domestic rate), fixed by Central Government.

The amount of rates payable is calculated by multiplying the Rateable Value by the poundage rate.

What is Rateable Value?

There has been a statutory requirement of the VOA/Assessor to carry out a 'General Revaluation' every five years on commercial properties. However, from 2023, revaluations will be carried out every three years.

The current business rates revaluation took effect from 1 April 2017 and we lodged nearly 2,000 Revaluation appeals for over 250 clients which achieved a significant number of successful results, examples are is shown in our Case Studies section.

The Rateable Value calculation is effectively an estimate of the annual rent which the VOA/Assessor believes the premises would command in the open market as at 1 April 2015 (the 'Tone Date').  For the next Revaluation the Tone Date is 1st April 2023.

Based on the Rateable Values which came into force on 1 April 2017, many landlords, tenants and occupiers saw a sharp rise in their rates, which went against the general downturn in the property market in recent years. We have successfully proven in a number of cases that the Assessor's value was too high, leading to value reduction and refunds for many clients.

Even if your rates bill is lower when the revaluation comes in for 2023, this does not necessarily mean it is correct and you should note your business rates will increase over the course of the 2023 revaluation in line with any increases in Rate Poundage. Therefore, the opportunity to appeal your business rates should also be explored.

And Rates Poundage?

The local Council (not the Assessor nor VOA) is responsible for rates collection and the administration of the various business rates reliefs or reductions which may be available.

For 2022/23, the national poundage rate for rateable values up to and including £51,000 is 49.8 pence per pound, 51.1 pence per pound for rateable values between £51,001 and £95,000, and 52.4 pence per pound for rateable values £95,001 and above.

For budgeting purposes, we would suggest you work on the basis that your rates payable will be around 51% of the Rateable Value.

Where We Can Help ...

Whilst every Local Authority will say the appeal process for setting non domestic business rates is fair, the fact of the matter that is not always the case, and in our experience there is a lack of consistency in approach to handling business rate appeals. As such, it is important to seek the correct professional advice from a firm of Chartered Surveyors that understand the business rates system and Rating valuation. 

The appeals themselves can be a very complex issue, based around valuation theory and case law. At Business Rates Advice, we are a firm of Chartered Surveyors but also have the required experience, ranging from the most simple appeals to the highly techinal cases which we have prepared for the Lands Valuation Appeal Court.

As a result of various Relief schemes introduced by the Government, there are a number of options to be explored to help reduce your rating liability even further. There are also further types of relief for empty properties and charities.

A starting point is to ensure the business rates you’re paying is the correct amount and, if not, whether we feel anything can be done to reduce your rating liability.

We offer a free business rates healthcare check, which will be undertaken by one of our Chartered Surveyors.

If you wish to discuss any aspect of the business rates process please feel free to call us. All enquires will be treated in the strictest confidence.

Appealing Business Rates for 2023 Revaluation in Scotland - the deadline for submitting appeals has still to be confirmed by the Government

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