Business Rates
Rates are cited by many of our clients as the third highest overhead behind staff costs and rent.
The 2010 Revaluation will come into effect in April and property occupiers should understand how this affects them.
Rateable Values are set independently by the Valuation Office Agency. Revaluation takes place every 5 years and the next full revaluation of all Rateable Values will take effect from 1 April 2010.
Rateable Values will be updated based on rental levels on the previous statutory valuation date of 1 April 2008. On the whole, it is expected that Rateable Values will be significantly increased because in 2008 rental values were near their peak.
From October 2009, rate payers have been able to preview their probable Rateable Values, following the publication by the Valuation Office Agency of the Draft 2010 Rating List. These values can be appealed by businesses who feel they are unfair. Although appeals cannot be made until 1 April 2010, companies can be proactive and analyse assessments in preparation rather than be forced to follow settlements.
The Uniform Business Rate is set by the government. At a revaluation, the Uniform Business Rate is adjusted to ensure that in broad terms no more is raised in real terms from business rates from List to List. As the total Rateable Value has risen, the multiplier for 2010/2011 has been adjusted downwards from 48.5p in 2009/2010 to 41.4p for 2010/2011. The rate in the £ for “small businesses” has fallen from 48.1p in 2009/2010 to 40.7p for 2010/2011.
Rates Liabilities 1 April 2010
Rates liabilities can be calculated by multiplying the 2010 List Rateable Value by the Uniform Business Rate for 2010/11.
The resulting liabilities may then be adjusted for any qualifying reliefs or adjustments under the government’s transitional arrangements.
Transitional Arrangements
In principle, where rateable liabilities increase or decrease beyond a level set by the government, transitional calculations will determine the actual payment.
Empty Properties
For the financial year 2010/11 empty properties with a rateable value of less than £18,000 will be exempt from business rates.