2010
Business Rating Revaluation
Business
rates are a significant overhead for businesses. Typically,
these are equivalent to 45% of the annual rental value.
The
Valuation Office Agency (VOA) is required to revalue rateable-values
for non-domestic premises every five years. The VOA has recently
completed this task. The revised rateable-values will be effective
from 1st April 2010. These values are based on hypothetical
rental values for premises on 1st April 2008, a time of relative
prosperity compared to the current economic climate and a
buoyant commercial property market.
Commentary
on the revised rateable-values suggests that, as a result
of the deterioration of the commercial property market, the
inaccuracy of the information used by the VOA and the billing
authorities to calculate rateable-values, and, in an effort
to correct the undervaluation of premises during the 2005
revaluation, rateable-values may increase significantly during
the intervening 5 year period. To enable businesses to adjust
to the increased rating liabilities, transitional relief will
be available to address large changes in individual rateable
values. In these instances, rating liabilities will increase
year on year, with substantial increases realised over the
five year period.
The
VOA is currently issuing summary valuations to rate-payers,
specifying the revised rateable-values and summarising the
information that forms the basis of the assessment.
As
the rateable-value is based on the potential rental value
of the premises, the figure is influenced by a range of factors
including the circumstances of the site, facilities installed,
and the physical, geographical and economic attributes of
the site location.
Given
the sensitivity of the rental value to these factors and the
limited information held by the VOA and the billing authority,
it is important that the summary valuations and resulting
rate demands are scrutinised and the information used to inform
the assessment reviewed. This will identify whether the rateable
value is accurate and all appropriate reliefs and adjustments
are applied to calculate the rate liability.
Given
the limited information available to the VOA and the billing
authorities, rating liabilities are often inaccurate and are
frequently successfully challenged. However, the business
rating system is complex and a short term savings may result
in greater expense in the long term.
To
contact Adrian Smith to discuss your revised rating assessment
and the approach of the Valuation Office Agency and the Billing
Authority to the 2010 business rating click here
|