What are business rates?

Business properties are assessed and given a rateable value by the Valuation Office Agency (VOA) in England and Wales and the Scottish Assessors Association (SAA) in Scotland. This value is then listed on the rating list in England and Wales or the valuation roll in Scotland. Councils use the rateable value of a property to calculate its business rates.

Revaluation

The next business rates revaluation for England, Scotland and Wales is scheduled to come into effect on 1 April 2017 and will be based on hypothetical rental values as at 1 April 2015. There is no date set for revaluation in Northern Ireland.

The new appeals process

From April 2017 there will also be a new process for challenging the rate decided upon in England and possibly Wales. It’s likely to involve a three-stage process:  

Check: Start by checking all facts are correct. If there are errors, inform the VOA. Agreed errors should be corrected quickly but if the facts remain in dispute, go to the next stage.

Challenge: This stage allows you to challenge your rateable value by setting out your reasons with supporting evidence and suggesting an alternative valuation. The VOA will assess the evidence and (1) accept your challenge and amend the rating; or (2) decline your challenge; or (3) request further evidence.

Appeal: The final stage allows for an appeal to an independent valuation tribunal. Based on the evidence provided, it will either grant or decline your appeal. It may also decide on a revised rate other than your suggestion.

The Government has announced measures to assist small businesses with this process, including:

  • a fast track through the system;
  • guidance on using the three-stage system without professional support;
  • and a lower level of fees for making an appeal – to be refunded if an appeal is successful.

Scotland

If you are a ratepayer in Scotland and you don’t agree with your rateable value, discuss your concern with your local assessor. If this does not resolve the issue, you have a right of appeal to the local Valuation Appeal Committee or, in some cases, to the Lands Tribunal and, if the matter is still not resolved, to the Lands Valuation Appeal Court. We expect the introduction of a deadline of 30 September 2017 for appeals against the new rateable values in Scotland.

Transitional arrangements

In the past, the Government has introduced a transitional relief scheme to mitigate the effect of a potential increase in rates liabilities overnight. The current fund for transitional relief is £3.6bn but we’ll find out tomorrow when the budget is announced whether this amount will be increased.

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