Are you ready for the rates revaluation?
The problem
All hospitality businesses will be affected by the 2017 rates revaluation, which will come into force on 1 April. The UK-wide revaluation is the first time some occupiers will have had their rates reassessed since 1 April 2010 and, as with any revaluation, there will be winners and losers.
The law
Business rates are a local tax paid by occupiers of all non-domestic/business property. Rateable values are assessed by the Valuation Office Agency in England and Wales and the Scottish Assessors Association in Scotland.
A rateable value is given to each non-domestic property and this is used by local councils to determine a property's business rates.
Expert advice
Rate payers can calculate their estimated liability for the first year of the 2017 list (the collection of all the rateable values on the Valuation Office Agency website. The last list is from 2010). Depending on a number of factors, some businesses will experience a steeper increase in outgoings, so it's important to check this as soon as possible so these can be factored into your forecasts.
If you are unhappy with your new rateable value and believe it has been calculated incorrectly, there is an appeals process to challenge the figure, known as check, challenge and appeal. This process will now require the appellant or their agent to 'check' the rateable value prior to submitting a fully evidenced 'challenge' document alongside a revised valuation. The valuation officer will then consider the evidence and serve a notice of decision.
This will place further emphasis on expert knowledge and an intimate understanding of how businesses work to identify incorrect assessments.
To-do checklist
â- Check your new business rates value, which will be effective from 1 April, on the Valuation Office Agency website.
â- Seek professional advice or look to challenge your assessment if you believe you're being charged too much.
â- Ensure a full and investigative due diligence process to avoid any pitfalls and maximise any potential reduction.
â- An effective challenge process, if necessary, will require an in-depth knowledge of the market along with benchmarking against the rest of the industry.
â- Industry software can be used by the appellant's agent to analyse and compare assessments and will be useful in assessing the property in context of the wider market.
â- Gain an understanding of the appeals process requirements.
â- 2010 list appeals can still be submitted, which could materially affect your liability on the 2017 list if challenged correctly. The deadline for submitting appeals is 31 March - seek further information if necessary
Beware!
During the challenge stage, if any information is omitted or inaccurate information provided (whether knowingly or unknowingly) there is
a system of penalties of up to £500.
If appellants are unsatisfied with the decision notice handed down by the Valuation Office then a full appeal to the valuation tribunal for England will be the only matter of recourse. However, an administrative fee will be payable of up to £300. Also, with the new check, challenge and appeal system, there will no doubt be fewer appeals, which will mean more time to consider their outcome.
This may in turn result in a greater number of assessments being monetarily increased than on previous lists where appeals may have simply been dismissed.
Contact
Adam Brooke is head of rating at Christie & Co adam.brooke@christie.com
