Associate Partner, Land Management
Many commercial property occupiers in England have seen changes to their business rates for the first time in seven years. While some rates have decreased, many have significantly increased.
Business rates are charged on most non-domestic properties, including pubs, holiday cottages, farm shops, houses open to the public, wedding venues and land used for storage. Thankfully, land and buildings used for agriculture continue to be exempt.
The rates are calculated by multiplying the rateable value (RV) by the uniform business rate (UBR); the UBR is dependent on the RV and the location of the property.
New RVs came into effect on 1 April 2017, and are based on the estimated rental values at 1 April 2015, assessed in England by the Valuation Office Agency. This is causing the most debate, as hypothetical rents are rarely the same as the actual rent at the time and are unlikely to reflect individual circumstances, therefore an appeal could be necessary.
However, businesses could take advantage of a number of reliefs. From April, small business rate relief offers 100% exemption if a business occupies one property with an RV of £12,000 or less. Where a property has an RV of between £12,001 and £15,000, a tapered relief from 100% to 0% is also available.
For businesses in rural locations with a population of less than 3,000, rural rate relief of up to 100% may be available. To be eligible, it must be the only shop or post office in that location and have an RV of less than £8,500, or be the only public house or petrol station and have an RV of less than £12,500.
When a property becomes unoccupied, 100% empty buildings relief is available for the first three months, and listed buildings are completely exempt. Also, material change in circumstances relief should be temporarily available if activity in the area – such as road works or flooding – is affecting business performance.
Revaluations have also taken place in Scotland and Wales, where different rates and reliefs apply. What is certain is that if an appeal is appropriate, it is likely to be a lengthy process. Visit gov.uk/introduction-to-business-rates for more details.
Image: Business rates are charged on holiday cottages, such as those at Farndale Cottages in North Yorkshire. Find out more about Farndale Cottages at farndalecottages.co.uk.
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