Posted on 19th Aug 2016 - Share this blog/article
The government adjusts the value of business rates to reflect changes in the property market. This normally happens every 5 years. New Business Rates will be introduced from 1st April 2017, meaning that all commercial property will be revalued for business rates for the first time in seven years.
Business rates are a property based tax, collected by Local Councils to fund local services. They are broadly based on the rental value of property.
Early predictions from the property industry suggest that revaluations will result in significant increases in London and the South East. Elsewhere there may be less of an impact, and some areas may well see a reduction in their rateable values.
The new rates effective from 1st April 2017 will be based on revised rateable values of properties. The draft revised rateable values will be notified in September 2016.
If a property owner disagrees with the rateable value set by the government, they may appeal via the new business rates appeals system.
The revised rateable values can’t yet be formally appealed, but businesses are advised to start the process of gathering valuation information now to prepare for any appeals they may wish to make after 1 April 2017.
From 2017 the old approach of appealing a rates assessment won’t be possible. Instead, ratepayers will be expected to complete two preliminary stages (check and challenge) before a full appeal can be progressed.
Both these stages will require full valuation details being submitted by the ratepayer. There will be penalties for inaccurate or misleading information. In addition, digital accounts will be required in order to progress through these preliminary stages.
Leading up to April, it’s a good time to take stock of property portfolios from a rates point of view. Have the charges been verified, are the rates levied by the council legally payable, have all reliefs and exemptions been considered etc.
It is also worth considering a health-check and looking at future projects for business rates. Strange as it might sound, declaring an increased business rates liability now could lead to long-term savings for the next five years.