Morgan: hold back your rating appeal

Licensees hit by the smoking ban will have to wait until next year to appeal for a reduction of their business rates. That is the view of ratings expert David Morgan on the first anniversary of the English smoking ban.

"A lot of people will be in a position to appeal their rates, but until they've got the figures to prove it they cannot. A sustained drop in trade must be shown through VAT receipts, which are issued quarterly," he said.

If an appeal is made and won in the existing rate year (April to April) then operators could even see a rebate on last year, in the form of a discount applied to the next year's payments. But if a smoking shelter is elevating trade and a pub's VAT receipts are higher operators could see a rise in business rates.

Morgan cautioned that before making an appeal licensees should make enquiries with the Valuation Office to find out how the last rating assessment was calculated.

He said: "The danger is that if the appeal is made and the original assessment was on a very low trade basis, it could trigger an increase in the rating assessment."

Morgan predicts that the best time to enter an appeal will be just before April 2009 when the fall in trade can be proven.

Transitional relief

A system is in place to guard both parties to soften the impact of a dramatic change in rateable value. This is known as "transitional relief". It limits the extent of upwards or downwards changes on a variable percentage that differs depending on the Valuation Office in question, 10% being a typical amount each way.