14.6 C
Lancashire
Tuesday, July 23, 2024

‘Business Rates – A tax system plagued by apathy’

Steve Hughes, Chief Executive of RVA Surveyors

“Each year, the Government sets aside an estimated £1.5 billion for business rates rebates. That’s a staggering figure but there are two sides to that (very large) coin. One way to view this is that there is a pot ready for businesses to benefit from should their business rates be miscalculated. That is, of course, a positive thing, but the business community should also question why this figure is so high. Just how prevalent is business rates overpayment and how often does a business miss out on a rebate or reduction?

“What we find all too often at RVA Surveyors is that businesseswill assume that they are paying the correct business rates for their commercial premises. On the face of it, that’s a reasonable assumption. We are programmed to accept that our tax is calculated based on our circumstances and we very rarely question the accuracy. Some may even assume that they will be notified by the relevant Government department if they are paying too much tax. It is this kind of apathy that makes business rates an archaic and deeply flawed system. Querying your business rates is an unfamiliar, daunting and time consuming process and one that many will avoid. Read on for our guide on business rates and the opportunities (and pitfalls) for businesses.”

How is my business rate calculated?

The Valuation Office Agency (VOA), which oversees business rates, calculates a property’s rate from its ‘rateable value’, which is based on a property’s open market rental value, its size and its usage. Rateable values are published in the VOA’s ratings list, which have historically been re-evaluated for properties in England and Wales every five years. Having a rateable value for a property should, in theory, create a simple and consistent system. The trouble is that basing a business rate on simple desktop calculations doesn’t take into account the different features of a building that may entitle a business to a lower rate.

How do I know if I am on the correct business rate?

The VOA  has a digital system called Check Challenge Appeal through which a business can first Check if their rate is correct, then Challenge if they believe their rate is incorrect and then finally Appeal if the previous steps have been unsuccessful in achieving a reduction. Check Challenge Appeal can be challenging to navigate but, when undertaken by a specialist who can scrutinise the detail and inspect a property, can bring about huge reductions. It is important that businesses don’t take anything for granted with business rates. At RVA Surveyors, we have an 85% success rate when it comes to reducing our clients’ business rates liability, which just shows the prevalence of overpayment.

What happens if my business rate is too high?

If a business undertakes the Check Challenge Appeal process and is found to be overpaying on their business rates, they could be entitled to a rebate for the historic overpayment from the beginning of the current ratings list (2017) and a reduction to the end of this ratings list and beyond.

Will the Valuations Office Agency get in touch with me to check I am on the correct business rate?

No. This is one of the greatest pitfalls of the business rates system. The VOA is held to account through the Check Challenge Appeal process and cases lodged should be managed to strict deadlines, although the VOA is currently very behind and has a backlog of Check Challenge Appeal requests. Neither the VOA or a Local Authority will approach a business to check or reduce their business rates liabilities. The onus is on a business to challenge them.

The Government has moved the ratings period to three years. How will this impact me?

In this year’s Autumn Budget, the Government announced that it will increase the frequency of the new ratings list, moving to more frequent three-yearly valuations. This essentially means that business rates will be recalculated every three years. This move is supposed to ensure that properties are subject to fairer business rates that represent their property and the wider market, but what we have seen in recent years is that the Government can extend or shorten the ratings list whenever they choose. For example, the VOA has amended the ratings lists seven times in recent years. So there is a lot of doubt and uncertainty in the system. There is also a worry that moving a three-yearly valuationscould place even greater strain on the VOA, which could exacerbate the issues of overrating and overcharging.

I am due to modify my property. Will this impact my business rates?

Yes. If you make changes to your commercial property, it could impact your rateable value. For instance if you installed air conditioning, built an extension or upgraded the property in some way then your business rates may increase, however depending on the changes you make you can equally reduce them.

For more information on how to reduce your business rates liability, visit https://www.rvasurveyors.com/

spot_imgspot_img

Latest

Appy Pie Expands Portfolio with Acquisition of Appsmakerstore.com

NOIDA, INDIA, July 18th, 2024 – Appy Pie, a...

ROCCIA’s 2024 trade event packs a punch with help from boxing legend Tony Bellew

ROCCIA’s annual Trade Event, which took place this month,...

Tosyalı SULB Launches Investment in World’s Largest DRI Complex in Libya

BENGHAZI, LIBYA – In a significant move to expand...

Ribble Cycles Redefines Road with Launch of New Allroad Bikes

PRESTON, UK. 18th July, 2024 - Ribble Cycles, a...
spot_img

Subscribe to our newsletter

Business Lancashire will use the information you provide on this form to be in touch with you and to provide updates and marketing.

Don't miss

ROCCIA’s 2024 trade event packs a punch with help from boxing legend Tony Bellew

ROCCIA’s annual Trade Event, which took place this month,...

Self-storage for home-based businesses: Expanding without the overhead

Running a home-based business offers numerous advantages, including flexibility,...

Bury author scoops Lancashire’s Book of the Year Award for third year running

A talented author from Bury has been handed a...

Best Horse Racing Betting Apps In The UK – July 2024

If you are looking for the top horse racing...

More News

Jack Mason – AI Innovation and Regulation Are Hurting Microsoft

Microsoft's recent decision to leave the OpenAI board amidst increasing regulatory scrutiny marks a significant juncture in the tech industry. This move, first reported...

HOUSE OF KHAN: Legacy and History in England – Sir Pasha Isa Effendi Khan II, Founder of House of Khan Limited (1926)

Patriarch of House of Khan Legacy (1881-1948) Sir Pasha Isa Effendi Khan II stands as an enduring symbol of aristocratic refinement and entrepreneurial brilliance, etching...

Adaptability: The new competitive advantage for businesses

Following the pandemic the UK business landscape has become more dynamic than ever before. Traditional business models are undergoing challenges, and those adapting and embracing...