Rural business owners urged to act on business rates revaluations

Gwyn Church, Strutt & Parker.

Gwyn Church, Strutt & Parker. - Credit: Archant

Rural business owners and farmers with diversified enterprises are being advised to check the implications of their business rate revaluation now, as some see rateable values double.

The Valuations Office Agency (VOA) has reassessed the rateable value of every commercial property in the country with the new rates due to take effect from April 1.

It will be the first time in seven years that the rates will have changed, and while some people may benefit from a decrease, there is already evidence that some rural businesses could be facing steep increases.

Gwyn Church, a surveyor in the land management department at the Ipswich office of Strutt & Parker, said that media reports may have led rural business owners to expect business rates to fall away if they are not near London and the South East.

However, he has already seen a number of rural businesses running pubs, farm shops, offices, livery yards and storage facilities looking, in some cases, at a rise in rateable value of 50 to 100%.

“The VOA published draft rates on its website at the end of September and I would urge commercial property occupiers to check them as soon as they can. Here in Suffolk, we are tending to see both small and large increases have been applied, rather than reductions,” he said.

The rateable value relates to the measurable area of the premises so this will need to be checked carefully and to a hypothetical April 2015 rental value.

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“This is the area which is causing the most debate as hypothetical rates are rarely the same as the actual rent at the time and are unlikely to reflect individual circumstances,” he said.

Some may want to argue that the per square metre rate is too high, or that the floor area used in the calculation is incorrect, he said.

“Although appeals will not be considered until April 2017, changes to the appeal system suggest this could be a long process, therefore it will be best to start it as soon as possible,” he said.

When people looked at their rateable value, they needed to remember that it is not the same as their final business rates bill, he added.

“The percentage of the RV paid is known as the Uniform Business Rate (UBR) and is currently around 50%. There are also a number of reliefs which businesses might be able to take advantage of,” he said.

Small Business Rate Relief will be available for businesses which only use one property and if the rateable value is less than £15,000.

The relief will be 100% where the RV is £12,000 and on a sliding scale if the RV is between £12,001 and £15,000. If there are additional properties, Small Business Rate Relief will not be available where the RV of any other properties is greater than £2,600. Following the chancellor’s autumn statement, Rural Rate Relief is set to increase to a fixed 100% relief for businesses in a rural location with a population of less than 3,000.