WHAT’S THE PROBLEM WITH THE BUSINESS RATES RE-VALUATION?
To provide some context to this question, in the normal course of events there would be a re-valuation of all Rateable Values every 5 years. This has been the case since 1990 however, in 2014 the Government decided to postpone the 2015 re-valuation until 2017.
This therefore means that with effect from 1 April 2017 every property in England, Wales and Scotland will have a new Rateable Value.
There are numerous articles and reports in the press at the moment screaming blue murder about the unfairness of this tax and how it is killing our high streets in what are perceived to be unfair increases.
The reason behind such steep increases in some cases is purely down to the fact that the last re-valuation date was 1 April 2008 and therefore in the 7 year period values have moved on to such an extent that in some cases higher Rateable Value is now considered by the Valuation Office to be appropriate.
This relates mainly to properties in London and the South East. If the re-valuation had occurred as originally intended at the valuation date of 1 April 2013 then these increases would not have been so steep due to the improvements in the property market.
Alastair Fearn, Director of FHP’s Business Rates Team added:
“In addition to the Rateable Value increases in part of the Country the real killer in my view is the changes to transitional relief. In short transitional relief is designed to phase in increases or decreases to rates payable between Rating Lists. The intention is that no occupier should face a particularly steep rise or fall in their business rates payable as a result of a significant change in their Rateable Value. Instead any rise or fall should be phased in over a number of years.
The Government have however altered the transitional phasing arrangements which means that for larger properties any increase is limited to 42.5% per year. The result of this is that many businesses who have seen a rise in their Rateable Value will not benefit from a cushion of transitional phasing because the transitional limits are set so high.”
There is nothing that can be done about Transitional Relief but every ratepayer has the right to challenge their Rateable Value. We encourage all ratepayers to take professional advice before challenging their Rateable Value because values can go up as well as down! Ratepayers have until 31 March 2017 to challenge their current Rateable Value and can challenge their new Rateable Value when it comes into effect from 1 April 2017.
For no obligation advice and assistance please contact Alastair Fearn, Director within our Business Rates Team on 0115 9082100 or email@example.com.