Business rates revaluations – what does the new draft list mean for commercial property owners?
From April next year, 1.8 million ratepayers of commercial properties will start to feel the effects of new business rates revaluations. You may already have received a questionnaire sent from the VOA, asking you about how much rent you pay or how much income you receive, so that your new business rates can be calculated. We take a look at how it might affect you.
Saturday 1 April 2017
This is the day that the new business rates revaluations come into effect. It has been seven years since the last revaluation and if you’re a commercial property owner you may feel concerned about how the new rates will affect you. You will find out in October of this year what your new Rateable Value will be.
However, it may not all be bad news. For many businesses outside of London, a rate reduction is anticipated. Many retail centres (shops in high streets, and some shopping malls) will actually have their business rates reduced, some by up to 71%, leading to a lessening of the financial burden for their owners, and it is hoped that the new lower rates will encourage more small businesses to begin trading.
Some London-based businesses, on the other hand, primarily those based in central areas, and some parts of the South East, are expected to see significant increases in business rates with some experiencing rises of an astonishing 415%. Business leaders have warned that these increases could lead to many retail premises closing their doors as they struggle to meet the new rates.
The government will still be offering relief from business rates. Properties with a rateable value of below £12,000 will receive 100% relief, meaning that they pay no business rates. Those which attract R.V.s between £12,000 and £15,000 will be offered tapering relief. The threshold for the standard rate of business rates is also increasing from £18,000 to £51,000 which, it is estimated, will reduce higher rate liabilities for around 250,000 small businesses.
These changes to business rates come at a time when the government has announced that local authorities will be allowed to retain the money they raise from business rates, an estimated £26 billion per year, to spend in the ways they best see fit. Some council leaders have argued that the cutting of business rates will affect funding for local services, at a time when significant cuts have already been made.
Business owners are advised to plan ahead for when the new business rates come into force. Many will see reductions in the amount they have to pay, but some will see rises. If you’re one of the ones affected by an increase you will still be able to appeal.
If you’re concerned about how the changes will affect your business revenue or need guidance about how best to prepare and present your appeal once you’re informed of the amount you’ll have to pay, get in touch with our team. Our experienced staff will be able to offer you advice and information about the new rates and how best to mitigate your business rates.
Written by: Craig Newton on Tuesday 27/09/2016