Business rates case studies

1320 Solihull Parkway

Location: Birmingham Business Park
Client: Quartz Investments
Size: 25,000 sq ft

KWB was instructed to handle the business rates liability of commercial property investor, Quartz Investments, on 1320 Solihull Parkway, Birmingham Business Park. Quartz had recently acquired the part-occupied property and planned a comprehensive refurbishment to include a full strip out, new floors, windows, and upgrade of mechanical and electrical facilities.

KWB and Quartz Investments were of the opinion that, as the office building was not occupiable during this period of refurbishment, it should carry no rateable value. The Valuation Office had resisted this idea, demanding that their business rates be paid on the whole property – representing a very high void cost for the empty space.

KWB decided to use the Monk v Newbigin case from March 2017, a legal case that has had far-reaching implications for owners and developers of vacant commercial property.

SJ & J Monk, which owns Avalon House offices in Sunderland, had been paying business rates on the 1st floor of Avalon House through a period in which it had been stripped back to shell, and received much of the same work as was carried out at 1320 Solihull Parkway.

After a long and complex appeal, the Supreme Court overturned the Valuation Office’s decision – reducing the rateable value of Avalon House to £1, and setting a precedent for the UK commercial property world with regard to business rates.

During its appeal on 1320 Solihull Parkway, KWB raised the verdict of the Monk v Newbigin case, which bore such similarity to that of Quartz Investments. The appeal was successful and achieved a reduction in rateable value, down to £0 – resulting in the refund of £80,000 in business rates payments.

Cheltenham House

Location: Birmingham
Client: Circle Property Unit Trust
Size: 12,000+ sq ft

KWB were instructed to advise on the business rates liability in relation to an office and retail redevelopment in Birmingham city centre. The scheme involved the phased refurbishment of a period, four storey office building including ground floor retail and leisure uses. Based on the substantial level of refurbishment and alterations to part of the building we were able to negotiate with the Valuation Office Agency a zero rating on the majority of the building for a period of over 12 months. This was a vital reduction in the landlord’s overheads when very limited rental income was being received.

Forward House

Location: Henley-in-Arden
Client: Forward Midland Llp
Size: 30,000 sq ft

KWB were instructed to advise on the business rates liability for this new build office scheme in Henley-in-Arden. The valuation office had made a single assessment, of the property, of £450,000 which was to be effective from the 1st April 2010. However, with our knowledge of rating law and rental levels we advised the client on the best strategy for reducing this overall assessment.The building was partly used as a serviced office centre and so by splitting the assessment into smaller suites and a reduced rate per unit, we were able to reduce the total rateable value to £255,000. We also phased the effective dates based on the actual occupation of the building which reduced the level of back rates payable. We have been retained by the landlord and serviced office provider to manage the rates liability on a monthly basis to ensure that all eligible rates relief is claimed for vacant periods as well as other types of relief, so that landlord only pays what is necessary.

Trinity Point

Location: Halesowen
Client: Charlton (H) Llp
Size: 80,000 sq ft

KWB acquired this office building on behalf of an investor client. At the time of purchase the property was about 75% vacant and had a substantial empty rates liability. The prospect of finding occupiers for the space in the short term was remote, largely due to the state of the market at the time. However we found an immediate solution by letting all the empty space to a registered charity on a flexible term at a nominal rent. The charity took on the rates liability and in return the landlord paid a management charge to the charity. Marketing for the property could continue as normal, with the charity surrendering space in the building as and when required. The saving to the landlord over the year was in excess of £130,000 equivalent to 66% off the full rates that would have been payable.

Want to know more?

Contact Martin Cook

0121 212 5993