2017 rates revaluation: a window to improve your position before 1 April
Business rates often represent the third highest cost for most businesses, after rent and salaries. And with the impending changes to the rateable values from 1 April 2017, recent press has been full of speculation, expecting a significant (and potentially damaging) impact on businesses as a result.
Business rates revaluations are revised every five years, based on assumed market rental values determined by the Valuation Office two years prior to the start of a cycle. However, the changes in property values between the 2008 recession and the market in 2013 meant the government delayed the 1 April 2015 introduction until now, to shelter businesses emerging from recession from the additional cost.
What this really did was compound the problem as property prices kept increasing. Now, the expected impact of the change is significant, with published increases of up to 65% in some parts of the South East. The changes are expected to be introduced from 1 April 2017 under a transitional arrangement that bridges the gap between ‘old’ and ‘new’ rates using a stepped increase model over the next few years.
On top of this, the Valuation Office, keen to reduce the number of appeals, is introducing from 1 April a complex, protracted and expensive new appeals process called Check, Challenge, Appeal (CCA).
If your existing rateable value hasn’t been looked at by a professional, or you feel it is currently incorrect on assumed rental value or area, or it has undergone a material change, you can use the window between now and 31 March to appeal against your 2010 rateable value. If successful, this will:
- generate a refund backdated up to two years
- reduce the starting position from which the stepped transitional rate will be calculated – reducing your rates bill over the transitional period
- potentially reduce your 2017 rateable value.
These are all valuable savings for any business expecting a steep rates increase. But you must lodge your appeal before 31 March 2017. Remember the appeals process can increase as well as decrease your rateable value, so review your position carefully.
It’s worth thinking about, and our extensive network means we can point you in the right direction for further advice. Get in touch with your usual BKL contact or Myfanwy Neville for more information.
You may also like to read our blog post commenting on news coverage of the business rates revaluation.