The Valuation Office Agency (VOA), a government agency, has recently given every commercial premise in the country a new rateable value as of 2023. This has raised concerns for business owners: what does this mean for their businesses? In this article, we will cover everything you need to know about rateable value, how it is calculated, and if you should appeal it.
First of all, it is important to check the rateable value figure on your new rates bill. This figure is not what you pay, but it is the starting point for how your bill is calculated. The rateable value (RV) represents what you as a tenant would pay to rent the premises you occupy if you had agreed on a new lease rental arrangement two years before on 1 April 2021.
Let’s take an example: if the RV on your rate demand is £35,000, the VOA is saying that if you arrived at your actual premises on 1 April 2021 and wanted to set up your business, you would pay a rent of £35,000 per annum to your landlord. If you agreed on that rent, then your RV at £35,000 is correct, and there is no point in appealing that figure.
However, the valuation date used by the Government, which is 1 April 2021, actually falls in the middle of the COVID-19 pandemic and the lockdown. This raises a question: as a business owner, would you have turned up “fresh to the scene” on that date? What would you have paid to rent those premises on that date? If you were in retail/hospitality, you could not actually use your premises on that date, and if you were in an office, your staff was probably working remotely.
Therefore, if you would have negotiated with your landlord for rent concessions or would not have rented it at all, there is an argument to say that your RV is too high, and you should consider appealing.
It is also crucial to check the accuracy of the facts/floor areas. You may already have had a report before taking the premises or measuring the space you occupy with a tape or an electronic app. You can compare your floor area with the VOA valuation by visiting the Government website.
However, the VOA may not have inspected your site for many years, so do not assume their information is correct. If your property is a pub or a property where the RV is arrived by looking at potential trading information, that will not be available until you start to engage with the VOA through the appeal process.
Now, the question arises, how do you appeal your RV? Yes, you can appeal yourself, but it is essential to go through the thought process and actions we have mentioned above. If you think the VOA has made an obvious error, start the process by visiting the business rates valuation account website.
Here, it is crucial to beware of cowboys, crooks, and unqualified advisors who may approach you for help. Any rating surveyor who rings you up and tells you that they can save you money without knowing your property or having inspected it is probably unqualified. It is important to be aware of the scams associated with the publication of the new list. If they want money up-front, it is important to put the phone down.
The rating industry is currently unregulated, so it is essential to seek professional help. Like you wouldn’t get any other financial advice from someone unqualified, so why do this with business rates? You can use the information available publicly to deal with queries. However, if you need help, you should get qualified, professional advice; it will be worth it.
Our advice to business owners is to check their rates bill and see if they are getting any business rates relief. There are over ten types of business rates relief that could apply to your rates bill – are you eligible for any of them? You can check here.
The non-domestic rating bill has had its second reading on 24 April. While there is a lot to support within it, there are some significant potential changes that will not be helpful for businesses. It puts the onus on ratepayers to provide up-to-date information to the VOA on a regular basis; this could be small building works, changes in turnover, or a change in rent. All of these must be provided to the VOA within 60 days, or severe fines will arise, with the ultimate sanction being imprisonment.
In conclusion, businesses must be aware of their rateable value and make informed decisions based on the above considerations. It is important to keep the VOA up-to-date and seek professional advice if necessary. Check your rates bill every year and see if you are receiving any business rates relief. Finally, keep an eye on the non-domestic rating bill and its potential impact on your business.