BUSINESS RATES REVALUATION WILL SEE WINNERS AND LOSERS

April will see the revaluation of every property in the UK which is liable for business rates – with the new rateable values taking effect based on the rental value of each property in April 2021, says Nick Williams..

Given that the current rateable values are based on rental values prevailing in 2017 (to put that in context, that is pre-Brexit and the coronavirus pandemic), some businesses are likely to see some big changes in their business rates bills.

As always when there is a revaluation, there will be winners and losers.  Amongst the winners are likely to be a proportion of retailers, given that High Street rents have been depressed in relation to other commercial properties in recent years.

Conversely, those occupying buildings which have seen increases in demand and corresponding rises in rent, such as warehousing and light industrial units, may see a significant increase in their rateable value.

For those occupying smaller buildings which are exempt from business rates through the Small Business Rate Relief scheme, the revaluation could tip them into being liable for the tax. 

Currently, those buildings with a rateable value of £12,000 or below are exempt, with a further taper between £12,001 and £15,000.  So a building which was under that limit in the previous valuation could become liable for business rates following the revaluation..

For those facing increases in the rateable value of their premises, there is an appeals process against the new valuations – but it is important that any appeal is based on sound reasoning.

The first stage of the appeal process is to establish whether there are indeed grounds for claiming that the revaluation is too high.  This is likely to involve looking at the valuations of similar properties in the area, and ensuring that there are no factual inaccuracies on which the revaluation is based, such as discrepancies with measurements and the overall size of the building, coupled with the floor area rates adopted.

Only when you have established a sound rationale for appeal should you proceed.  The appeals tribunal has the power to increase the new valuation as well as lower it, so there is a judgement to be made in marginal cases as to whether it is worth the risk of appealing.  As ever, seeking expert advice is vital.