Business rates revaluation 2017
The business rates revaluation 2017 is now in force. The much-needed correction, brought by the business rates revaluation, has helped to bring rateable values in line with the significant reductions in rents seen in some sectors – not least for commercial property outside of London.
The new system for challenging your business rates, following the business rates revaluation, ‘Check, Challenge, Appeal’, is a three-stage process. Some businesses will be able to achieve a result in just the first two stages, Check and Challenge. Others, though, will have to go through the full three stages, which will require the case to go to tribunal for Appeal.
Are you prepared for the impact of the business rates revaluation of your business premises that became effective from 1st April 2017?
There have been some significant changes introduced, the key ones being:
- Small businesses that occupy their sole business property with a rateable value of £12,000 or less now pay no business rates
- The appeal system has changed to a three-stage process known as ‘Check, Challenge, Appeal’ (CCA)
7 years since the last valuation list was updated, the 2017 business rates revaluation will have hopefully brought the rateable value of your commercial property back in line with market values. The new rating should also fairly reflect the prevailing value of your property and not an inflated value, as is the case currently with many commercial buildings, particularly those outside of central London.
The Valuation Office has compiled the new list which is based on a valuation date of April 2015. They gather this information mainly through the issue of ‘Request for Information’ forms. The 2017 rating list is now available to view at www.gov.uk/voa/revaluation.
KWB has compiled its own data on rental values and is able to advise clients on the new rateable values and whether they are accurate.
Act now to reduce business rates
It is therefore essential that any business occupier or commercial property owner looks at their current business rates calculation to see if there are any grounds to appeal for a business rates reduction. This could mean savings in rates already paid going back to April 2015 as a business rates rebate AND savings going forward.
Check, Challenge, Appeal
This new process is more onerous upon occupiers, and makes it more difficult for you to make your appeal.
Firstly, as an owner-occupier, you will have to formally claim a property as yours, through the government portal. Once it has been ensured that the person challenging their business rates is the legitimate owner or interested party, they are able to assign an agent to their case.
In the preliminary stages, we will conduct a ‘desktop assessment’ of your property free-of-charge and, if we believe that the assessment should be challenged, we can conduct the ‘Check’ process of the measurements and valuation of the property for a small fee. The potential outcomes of the ‘Check’ are that we may recommend going to the next stage, because we believe you could save money on your business rates, or, simply, peace of mind that your rateable value is correct.
When starting the checking process, we’ll go through the VOA’s valuation of all the floor areas and, if we disagree with it, we’ll advise on what it should be. The submission may contest floor areas which you may feel be incorrect or the description of property – for example, if space is used as storage – not retail – it will have a lower rateable value. This stage alone can reduce the rateable value by £1,000 – which, in some cases, would qualify companies for total business rates relief.
In order to make a compelling case at the Check stage, and to make the process as quick as possible, the following backing information will need to be provided:
- Floor area calculations
The Check stage could find that the Valuation Office’s assessment of the property was correct, but that the concluded valuation is not. If this is the case, it will be because there is a discrepancy in another factor which affects the property’s value, and this is covered in the Challenge stage.
Producing your Challenge case will require the provision of:
- A copy of the lease showing the rent
- Comparable evidence of other properties
- Details of any change of circumstances in the area*
*which could have a significant, negative effect on the value of the property, such as major roadworks – these are referred to as ‘material changes’.
You have 4 months from the Check stage to lodge a Challenge. From the point of your submission, the VOA then has 12 months to respond. If by this point they have not responded, we can go straight to the Appeal stage. Submitting an Appeal requires the payment of a fee of £100-£150, depending on the size of your business. For larger businesses that have multiple sites or branches, claims must be made for each individual property.
Fees paid out of savings made
KWB business rates consultants have successfully appealed numerous rating assessments on behalf of occupiers and owners, achieving significant refunds and future savings. We provide impartial business rates advice with free ‘desktop appraisals’, ‘Check’ assessments for a small initial charge and ‘Challenge’ and ‘Appeal’ fees geared to savings for the client.