Here are some Frequently Asked Questions and points you should bear in mind when thinking about your Business Rates
What should I look for in a Rating Service? A good company will undertake the following. Lodge an appeal with the District Valuer/Valuation Office against the 2017 Rates Revaluation Assessment of your pub, value your pub for rating purposes and negotiate a reduction with the District Valuer or Valuation Office if the value is too high.
They will make appeals if physical changes in circumstances have affected the trade at your pub (for instance the beer garden has been sold off for housing); lodging objections against any Valuation Office “Notice of Alteration” of the rateable value; advise on completing any notices that you may receive from the Valuation Office requiring information and special schemes of relief for small businesses as well as pubs in rural locations
Who foots the bill? Landlords will have negotiated special rates for this service which are passed onto you without any additional charges. They will have retained chartered surveyors to act for the 5 year period of the current rating list and collect an annual charge (probably £60 to £100) from you for the cost of this service. If you are dealing with this yourself you can expect to pay more than a tenant. It’s a matter of negotiation with your chosen professional and you pay them directly.
If my appeal is unsuccessful, do I still have to pay for the Rating Service? The fees are not based on whether investigations and appeals are successful as rating surveyors are employed to investigate the assessments of pubs and ensure that they are fair and expect to get paid for their work irrespective of the outcome.
I’ve been approached by a Valuer (especially if not appointed by your landlord if you are on a compulsory scheme) offering to deal with my business rates, should I use them? As a lessee or tenant you may well be required to take the landlord’s Rating Service and cannot opt for a different service. If not then you should also be very wary of anybody cold calling and asking for an up front fee as there are rogue firms operating. The Royal Institution of Chartered Surveyors (RICS) has issued warnings about this issue and if you’re approached my advice is to not sign anything until you are sure they are RICS registered and a reputable firm and don’t pay anything up front. The professional letters used by suitably qualified valuers should be MRICS and/or FRICS.
I have received an official form from the Valuation Office asking questions about my pub and non-domestic rates. What should I do with this form? There is a legal requirement to provide information to the Valuation Office, contact your Rating Surveyor for their advice before completing this form.
What’s the difference between Rateable Value and the Uniform Business Rate? Rateable Value (RV) is the actual assessment placed on your pub by the Valuation Office. The Uniform Business Rate (UBR) is the multiplier set every year by Central Government in the budget. The amount of Rates Payable is calculated by multiplying the RV by UBR.
How are my actual rates payable calculated? The local council will take the rateable value submitted by the Valuation Office (VOA) and multiply this by a ‘Uniform Business Rate’ (49.7p in most cases but subject to local supplements and some small business/ rural business reliefs). At the revaluation in 2017 the Government is committed to a ‘transitional’ scheme designed to phase in large increases and decreases in liability following a revaluation.
What is Small Business Rate Relief? This was introduced in 2005 to help small businesses. This rate relief, in England and Wales, for eligible businesses with Rateable Values below £12,000 will get 100% rate relief on their liability. This means, in effect, any business with a rateable value less than £12,000 will pay nothing. This decreases on a sliding scale of 1% for every £100 of Rateable Value over £12,000 up to £15,000. These changes take effect on April 1st 2017.
If your property in England has a rateable value below £18,000 (£25,500 in London) you’re considered a small business.
Even if you don’t qualify for small business rate relief, your bill will be calculated using the small business multiplier, which is lower than the standard one. This is the case even if your business uses more than one property.
You’ll pay the small business multiplier if your property has a rateable value below £51,000. The small business multiplier will be 46.6p and the standard multiplier will be 47.9p.
As the Rate Payer you need to apply for this relief from the Charging Authority who issues your Rates Bills, normally the Local Council.
There are separate arrangements in place for Scotland.
Is there any special relief available for rural pubs? If you are the only pub in a village with a population below 3,000 and your Rateable Value is less than £12,500 you may be entitled to a 100% reduction in your Rates Bill. These rates are applicable in England and Wales, separate arrangements are in place for Scotland. You need to apply to your local council for this relief.
How can I check the Rateable Value for my pub? The Rateable Value of your pub is detailed on the Rates Bill issued by your Council. If you’re in England or Wales you can check it on the Valuation Office Website www.voa.gov.uk and in Scotland you can visit the Scottish Assessors Association Website www.ssa.gov.uk.
I think my Rates are too high, what should I do? Contact your landlord’s Rating Surveyor (if on a compulsory scheme) or your chosen professional who will be able to provide an update if they are managing an appeal on your behalf. The Valuation Office has a programme in place for dealing with all appeals and your Rating Surveyor will be able to advise when your appeal is scheduled. If your appeal has already been agreed there may be the opportunity for further appeals if there has been a material change in circumstances that has affected the turnover at your pub.
Will my rates definitely go up at the revaluation in 2017? Not necessarily. The revaluation (2017) is supposed to ensure an ‘update of market value’. In some sectors values have fallen (between the relevant valuation dates) in keeping with local supply and demand factors. The revaluation is a chance for the VOA to take a fresh look at market rental value (at 1 April 2015).
What if my pub remains empty because of a fire or other disaster, can I get my business rates reduced? All empty properties are exempt from paying business rates for the first three months after they become vacant. Contact your billing authority to let them know if your pub becomes vacant but you are still responsible for paying the business rates.
Is it possible to make savings retrospectively? Once we pass April 1st 2017, there will be no opportunity to reduce an assessment any earlier than April 1st 2017 (the date of the new rating list) unless the Valuation Officer makes his own alteration before 1 April 2018.
Gerald Eve are a leading firm of ratings specialists and have produced this handy guide to the new appeal process: “Check, Challenge, Appeal”.
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