Your rates bill is formed essentially of two elements, the rateable value and the multiplier.
Rateable Value
This is assessed by the Valuation Office Agency and is normally based on the likely annual open market rent for the premises at a particular date. Rateable Values are reviewed every 5 years in what is known as a revaluation. They were last updated in Great Britain on 1st April 2005, based on market rents as at 1st April 2003.
The VOA is currently working on the new rateable values which will become effective in Great Britain on 1st April 2010, based on market rents as at 1st April 2008.
In order to assess the rateable value, factors such as the size of the premises and how they are used are taken into account. Different parts of the premises may be valued at different levels, for example the front part of the shop, nearest the window is more valuable than space further back or storage space in say a basement.
Details of the rateable value and how it has been calculated are shown on a summary valuation for each assessment on the VOA website www.voa.gov.uk.
The Multiplier
This is set by the Government and changes at the beginning of every new rate year. The product of the rateable value and the multiplier is what your bill is based upon. It can be complicated by things such as transitional arrangements, supplements and relief and if this is the case with your particular property, then we can advise you as to whether these have been correctly applied.
Examples of relief include:
• Small business rate relief.
• Charities and community amateur sports clubs.
• Other non-profit organisations.
• Certain rural business such as village shops and petrol stations.
• Hardship relief.
Appealing against the rateable value?
We would strongly recommend that you have your rateable value checked by professionally qualified Chartered Surveyors specialising in business rates prior to appealing, as assessments can increase as well as decrease on appeal. Savings achieved on appeals can be substantial and can be backdated significantly. Members of The Royal Institution of Chartered Surveyors (RICS) or The Institute of Revenues, Rating and Valuation (IRRV) must follow a rating consultancy code of practice. As well as having the rateable value itself checked thoroughly, there may be an opportunity to split or merge the assessment with another.
If you are new to a premises and still fitting out, then there may be ways of mitigating your rating liabilities by delaying the initial liability date. You need to check that exemptions and relief are maximised and experts can provide strategic advice and budgetary planning.
This briefing note has been prepared by Howard Elliott of Baker Davidson Thomas. For further information please contact Charles Marchant-White on Tel: 01256 320 555.
