Hot Off The Press – The New Business Rates List (effective 1 April 2017)
On 30 September 2016 The Valuation Office Agency (VOA) published the draft 2017 List Rateable Values for all non-domestic properties in England and Wales. These will come into effect from 1 April 2017.
Business rates are charged on non-domestic properties (eg. shops, offices, pubs, warehouses and factories) and are calculated according to a property’s “Rateable Value” which is set by the VOA.
The long overdue revaluation will reflect changes in the property market since the previous valuation in 2010.
Check, Challenge, Appeal
A new Check, Challenge, Appeal system is being introduced and will impose significantly greater obligations on ratepayers to prove that their assessments are incorrect and potentially impose financial penalties for non-disclosure of relevant information.
To avoid paying business rates at the wrong level (from 1 April 2017), businesses must take action now and check that the factual part of these valuations are correct. There is a six month period (from 30 September 2016) which allows businesses to, at least in part, ensure the physical factors relating to their property are correct before the new list comes into force on 1 April 2017.
To make sure valuations are accurate, businesses may also need to give the VOA or their assessor up-to-date rental evidence for the property at revaluation. The appeal process will therefore become more challenging and it is essential to seek professional advice in order to navigate the process.
Increases or Decreases in Rates Bills?
Overall, England saw Rateable Values increase by 9.1%. The estimated changes in Rateable Value between the 2010 rating lists and 2017 draft rating list) have been broken down by region and property sector. Unsurprisingly, the biggest increases were seen in London and the South East (London seeing a 22.8% increase). Wales saw its total rating revaluation fall by 2.9%.
The North West saw neither an increase or decrease (overall change, 0%) though within this figure there were increases and decreases in various property sectors.
Although many ratepayers will only see a small change in their rates bills at the 2017 revaluation, the change for some properties will be much more significant. In order to phase in these changes there will be transitional arrangements aimed at supporting ratepayers by allowing them to time to adjust to their new rates bills.
It is also important to understand that business rates bills are affected not only by revaluation but also by the tax rate – known as the multiplier – as well as various reliefs and the transitional arrangements.
To find out more about the issues raised in this post, or to discuss any queries regarding business rates get in touch with Ruth McCarthy or call +44 (0) 161 829 2599.
The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by berg or any of its partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.