Business Rates - Are You Paying Too Much?

06/03/2007

As businesses across the country receive their annual rates bills over the next few weeks the amounts may come as a shock as transitional relief diminishes and rates increase in an ever upward spiral.  If you have not already done so now is the time to consider challenging your rating bill.  A successful appeal can save thousands of pounds.

Local authorities calculate a property’s rates bill by multiplying the Rateable Value by a factor known as the Uniform Business Rate (UBR).  In the year commencing 01 April 2007 the UBR is set at 44.4 pence in the pound and at 44.1p in the pound for small businesses (one where the rateable value is under £15,000 or £21,500 in Greater London).   Transitional relief eases the burden of an increased rateable value from one five year period to another and limits the amount by which a rates bill can rise (or fall) each year following a revaluation.  

One challenge to an individual rateable value, known as a ‘proposal’ can normally be made against the assessment during the five year validity of the rating list.  However, if the property has been affected by a material change of circumstances, for example, a physical change to the property or its locality, which affects its value there may be a further right of appeal. 

“The appeals process is complex and one which is best left to an expert rating surveyor as it requires an understanding of the principles of property valuation as well as knowledge of statute and case law” says David Goodchild, Head of Rating Department at property consultants Aitchison Raffety.

Appeals are rarely dealt with quickly, taking on average between 9-12 months.  After a valid proposal has been made there will be discussions and negotiations with the Valuation Officer but if agreement is impossible the matter will be determined at a Valuation Tribunal hearing.  However any reduction in rates payable will be backdated, normally to April 2005.

“Rates liability for businesses occupying commercial premises is a significant outgoing and with many rateable values increasing sharply, businesses should look carefully at their assessments and consider seeking professional advice as to what action should be taken to minimise future liability.  By appointing a professional adviser substantial savings can be obtained” advises David Goodchild.

For further advice contact Aitchison Raffety on 01442 220800