Rating

Ashwell Rogers was founded in 1996 but our rating experience runs right back to the 1973 rating revaluation. Under every rating list since then we have successfully achieved significant rates savings for our clients by providing professional advice and undertaking rating appeals on a variety of different types of property, including high street and out-of-town retail outlets throughout the UK, restaurants and hotels, car dealerships, warehouses and major office buildings in central London.

It is our view that all ratepayers should understand the full impact of the 2010 revaluation on their business and take the appropriate action to mitigate their liability for rates. This can be done by looking at the levels of rent that they are currently paying so that quick evaluations can be made on whether appeals should be lodged against their new levels of rateable value.

Rating is undoubtedly a complex subject and whilst we do not profess to perform miracles, at Ashwell Rogers we undertake to provide sound professional advice at reasonable cost. We have the experience and knowledge that you need to make sense of the conundrum that is called Rating and would welcome the opportunity to assist you in reducing your costs of occupation by lodging an appeal against your rating assessment. We can also provide advice on empty rates and check through your rate demands, in addition to advising whether there are any other special situations which may merit an appeal against your rates, such as a “material change of circumstance”.

For more information please contact a member of our team.

How are Business Rates Calculated?

Often described as one of the “black arts”, business rates is undoubtedly a complex tax on occupation and is one of the biggest costs facing an occupier of any commercial property. Rates liabilities have become increasingly difficult to calculate accurately, but in simple terms the amount of rates that a company pays is determined by multiplying the Rateable Value of their premises by the relevant multiplier. Rateable Values are set by the Valuation Office Agency (VOA) in England and Wales or by the Assessors Department in Scotland and the Rateable Value of any property is an estimate of the rental value of that property at a particular date.

The 2010 Rating Revaluation

Rating revaluations are nothing new. The first “modern” rating revaluation was implemented by the Valuation Office in 1990 and since then they have been undertaken every 5 years. A new Rating List came into force on 1st April 2010 but the levels of the new rating assessments are actually based on rental values and economic circumstances as at 1st April 2008.

Unfortunately, this “antecedent” valuation date corresponds with the peak of property market activity in the UK, when rental values were at or close to their highest. As a result the total of all Rateable Values throughout England and Wales has increased by about 20%, although there are wide variations across different sectors and in different geographical areas of the property market. Undoubtedly though, office occupiers in central London have experienced the largest increases in their rateable values with many properties experiencing increases in excess of 100%.

The UBR for 2010/11

Under legislative requirements, rating revaluations are meant to be revenue neutral and so the total amount of tax collected throughout the UK should not change. Accordingly, as rateable values have increased, the Government has set the new 2010/11 Uniform Business Rate for England and Scotland at 40.7 p, a 15% reduction from the 2009/10 UBR figure of 0.481p.

In Wales the UBR rate has similarly been reduced from 48.9p in 2009/10 to 40.9p for 2010/11.

However, calculating your Rates bill is far from straight forward due to the various reliefs and supplements that have been introduced. Some of these are summarised below:

Small Business Relief

However, in England for those properties with a rateable value in excess of £18,000 (or £25,500 in Greater London) there is also a Small Business Rate supplement of 0.7p, effectively meaning that the true multiplier for most businesses will be 41.4p – not 40.7p.

In Scotland, ratepayers who occupy a business property with a rateable value above £35,000 from 1 April 2010 will pay a small supplement on the poundage rate (0.7p) towards the cost of their Small Business Bonus Scheme.

In Wales, there is 50% relief for most business premises with a rateable value

up to £2,400 and 25% relief for those with a rateable value between £2,401 and £7,800

Transitional Relief

Along with the UBR reduction the Government has introduced a new 5 year Transitional Relief scheme in England to help phase in the effects of the rating revaluation and to provide relief for ratepayers facing large increase in bills.

Under this scheme properties are defined as either “large” or “small” depending on the level of their rateable value and there are different maximum annual percentage increases for each category. Small properties are defined as those with a rateable value below £18,000 (or £25,500 in London) and the respective transitional limits are set out in the following table:

It should be noted that the above percentages are expressed in real terms and will need to be adjusted in line with the Retail Price Index as at the preceding September in each rate year. No transitional relief schemes have been introduced in either Scotland or Wales under the 2010 Rating Revaluation.

Crossrail Supplement for London

To further complicate matters the Business Rates Supplement Act 2009 has introduced new powers for local authorities in England and Wales to levy additional charges to specifically fund local economic development, such as infrastructure projects. In London the Greater London Authority has announced that there will be an additional supplement of 2p for every £1 of rateable value on all properties with a rateable value over £55,000 in order to help pay for Crossrail. This supplement is outside of the transitional relief scheme and therefore adds about 5% to the rates bill of most properties in the greater London area.

Empty Rates

The rules regarding empty rates relief were changed in April 2008 so that now whenever a commercial property becomes vacant rates will not be payable in the first three months but thereafter the ratepayer will become liable for full occupied rates, even if the property remains vacant. For industrial and distribution properties the initial void period is extended to six months. Exemption still applies to listed buildings and properties “owned” by companies in administration.