Tax & admin · 10 May 2017

The business rates appeal process – Paying over the odds for your premises?

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Appealing business rates may differ depending on which part of the UK you’re in

If you think the rateable value of your business premises is too high because of this year’s rates revaluation, there are steps you can take to lodge a business rates appeal and lower your costs.

As of 1 April 2017, the business rates owners pay to their local authority are dependent on the so-called “rateable value” of their premises from 2015.

The rateable value – determined by a government valuation officer who provides an opinion on what the annual rent of each commercial property should be –  gets set from a fixed date, two years prior to the latest business rates revaluation.

Therefore, for business owners, if anything has happened that could alter the rateable value of premises in the last two years, then that given to your premises as part of the business rates revaluation could be considered incorrect, and you may want to explore the options for adjusting your premises’ rateable value.

Business owners whose premises have been effected by new local developments, such as newly-built roads, pedestrianised areas or stations, for example, or who’ve witnessed significant change in the way their premises are used in the last two years, are more likely to have been given an inaccurate rateable value.

But, according to Mark Homer, co-founder of Peterborough-based developer Progressive Property, the business rates appeal process can often become drawn out, time consuming and expensive.

Owners should therefore be prepared, with accurate and detailed information about their property, as well as be confident that the rateable value given to their premises is in fact inaccurate, before considering a business rates appeal.

Homer’s business has bought, sold and renovated more than 500 commercial properties in the East Midlands area. He told Business Advice that successfully appealing the rateable value of premises typically takes around 18 months of haranguing the relevant government bodies.

“They make it hard for you to see the process through,” admitted Homer. “We’ve been given rateable values for premises in the past that were double what they should be, and the business rates appeal process still took over a year. In the meantime, the council will keep charging you the rates it’s come up with itself.”

The priority for owners should first be to check the new rateable value of their business premises, to see whether it matches the actual rent they pay.

For most premises, this can be done by visiting the website of HMRC’s Valuation Office Agency (VOA) – the body responsible for providing property-related tax and benefits advice to the government, in England.

To coincide with the revaluation, as of 1 April 2017 a new business rates appeal system has been introduced, based on a three-stage process of checking, challenging and, finally, appealing the business rates valuation assigned to your premises.

Checking and challenging the rateable value of your business premises is handled by the VOA, and must be done before a business rates appeal is launched. After that, appeals are handled by the Valuation Tribunal for England – an independent body.

Appealing your business rates may differ slightly depending on which part of the UK you’re in. So, if you’re a business owner in Wales, Scotland or Northern Ireland, find out which bodies are responsible for setting the rateable value of local premises and the specific rules each has in place to launch a business rates appeal.

Once you’ve checked the rateable value of your premises online via the VOA, find the summary valuation of the property (attached to its rating assessment entry in the rating list) to double check that the areas your business premises have been valued on are correct.

Next, make a note of the valuation reference scheme number used to identify your premises and check that it matches the age, location and specification of your property.

Small company owners can then check whether other business premises on that reference scheme have successfully appealed a rateable value, before submitting all the information online to the VOA, which is then obliged to send back its “check decision” for that property.

Business owners who aren’t satisfied with the VOA’s check decision can challenge it by completing a form explaining why their valuation is inaccurate.

After 18 months, if an agreement between business owner and the VOA about the rateable value of their premises hasn’t been reached, or if the VOA fail to respond in that time, owners are able to appeal the rateable value of their premises.

For small company owners, it’s possible to losge a business rates appeal only once, so it’s important to continue to communicate with the VOA, to reach a satisfactory decision, for as long as possible.

In Homer’s view, hiring a property agent to handle the appeal process is a worthwhile investment to get the best possible deal for your firm, given the time and complexities often involved when looking to appeal your business rates.

Homer added: “Use an agent if you’re thinking about a business rates appeal. They know better than anyone how to demonstrate why the rates slapped on you by local authorities can sometimes be extortionate.”

Read more of our coverage on business rates: 

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ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

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