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Evesham Transport ltd
BUSINESS RATES REVALUATION 2017 - WHAT DOES IT ALL MEAN?
Business rates were revalued this April, affecting bills for 2017/18.
Business rates are set in proportion to the estimated rentable value of the property. Soaring property values in London and the South East over the last few years have meant that business rates under the revaluation for that area are now higher, but in those parts of the country where property prices may have fallen, rates bills are now lower.
Changes will be introduced with a cap to help ease the transition, so that rates won’t change as dramatically as they may have otherwise.
Rates are normally reassessed every five years. However, the underlying property values that are used are always from two years previously, so when rates were last set in 2010 they were based on property values in 2008. The rateable value is then combined with a “multiplier” figure, which is set by the government, to establish the actual rates payable.
The difference this time is the re-evaluation is based on rentable values on 1 April 2015 and came into effect on 1 April 2017.
Under the new rules:
• properties with a rateable value of less than £15,000 will get small business rate relief
• empty non-domestic properties with a rateable value below £2,900 are exempt from rates
• transitional relief is available if the rates go up or down by more than a certain amount. The council will adjust the bill automatically if eligible.
Landlords with business tenants may also be affected. Changes to rateable value will have an effect on the amount of statutory compensation payable to the tenant under the Landlord and Tenant Act 1954. Therefore, if landlords oppose the renewal of a business tenancy benefiting from security of tenure, under that Act the tenant may be entitled to compensation. The level of compensation is calculated by applying a multiplier to the rateable value of the property. Landlords ought to take this into account when considering whether to oppose a lease renewal.
The changes to business rates are significant and businesses should check their rates bill carefully if they have not done so already. There is a new system of appeals called Check, Challenge, Appeal which seeks to resolve disagreements at an early stage. Businesses should use this process if they wish to appeal the new business rates assessed on their properties.