Insight

A guide to business rates

By Ian Sloan

- Last updated on GMT

Related tags: Rateable value, Appeal

'Some licensees are considering whether it might be possible to create a separate assessment for a detached function room'
'Some licensees are considering whether it might be possible to create a separate assessment for a detached function room'
Recent statistics reveal that more than 90% of councils have not informed firms they are able to back-date a claim under the Small Business Rates Relief scheme.

Many documents from authorities are also ‘poorly laid out and give historic or innacurate information’. Ian Sloan from Bankier Sloan, which carried out the research, shares his guide to business rates

Business rates are charged on all commercial properties and although collected by your local council, the money is centrally pooled and is then redistributed under an agreed formula by central Government.

What is the rateable value?
The rateable value for most commercial properties represents the market rent of the property as at 1 April 2008. However, in the case of pubs and licensed premises, the valuation is based on turnover and therefore many landlords who refurbish premises, and as a result see a dramatic increase in their trade, will see a similar rise in the rateable value.

Who are the valuation office?
The valuation office is an independent part of the Inland Revenue. Their officers are responsible for setting the rateable value. The valuation office also employs assessors to check measurements of established and new properties. When visiting they will usually not discuss with the occupier/trader any proposed valuation figure.  

Rate in the pound
This figure is set by central Government and in recent years has increased, on 1 April each year, by the RPI set in the previous November. The 2014/15 standard rate in the pound is £0.482 or £0.471 for small businesses.

Payment of rates
Since 1 April 2014, it has been possible to pay the rates in 12 instalments rather than the traditional 10.  

Rating appeals
It is possible to appeal the rateable value of your property/business. However, our advice would be to carefully consider any such action as it is possible for the valuation office to increase your rateable value if during the appeal process, it realises it has missed out a room or a recent extension.

Small Business Rates Relief (SBRR)
If you trade from a single property and it has a rateable value of less than £6,000, you should be paying no rates. If your premises has a rateable value up to £12,000 there is tapered relief.

Businesses that have not yet claimed can still apply for a rates refund back to April 2010. Most firms will need to fill out an application form from their local council to receive this.

Some licensees are considering whether it might be possible to create a separate assessment for a detached function room in order to create two separate smaller assessments, in order to benefit from SBRR.

Rural Rates Relief
This is available for businesses that are the sole licensed property in a village with a population of fewer than 3,000, providing the premises has a rateable value of £12,500 or less.

The statutory relief is 50% and many local authorities will give the remaining 50% under their discretionary powers.  

Rates on festival sites
Some licensees may be involved in running or co-ordinating festivals around the country and they should be aware that the valuation office has started to look at charging rates on these enterprises even if they are run as non-profitable ventures, and are ‘transient’ in nature.

View the latest study from Bankier Sloan here​.

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Related topics: Property law, Legislation

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