Starting from April 2017, businesses whose properties have a Rateable Value of up to £12,000 will not have to pay business rates at all. That’s music to the ears of many small shop owners and small businesses and a warmly received rise, doubling the existing £6,000 threshold. To add to this further, property that has a Rateable Value of between £12,000 and £15,000 will receive tapered relief.
Worryingly, despite this fantastic news, a recent survey has shown that 36 per cent of business owners are completely unaware of these recent changes put in place by government. To the average small business, the amount that could be saved is up to £5,900 for those whose properties have a rateable value of less than £12,000 per year.
On the whole, these changes are very positive for local businesses. For many, it will mean smaller overheads, less administration and a potential cost saving of £5,900.
The changes are scheduled to be introduced from April 1st 2017, which so happens to coincide with the next business rates revaluation – the process by which each commercial property has its rental value assessed by the Valuation Office Agency (VOA). This rental value is then used to calculate the business rates which you have to pay each year.
In order to prepare for the revaluations, the Valuation Office intends on publishing its new draft values for each property on 1st October 2016 ready for consultation with the local billing authorities.
Whilst a lot of small businesses will benefit from this change, when the next revaluation comes into effect, some businesses will unfortunately fall outside of the £12,000 threshold for rates relief. This will depend upon the nature of your property, what it is being used for and where in the country it is located.
It is the responsibility of the Valuation Office Agency for valuing businesses and it will often request information from a business owner via a ‘Form of Return’. However, because there are so many properties to evaluate (estimated at over 1.8 million), it is very easy for the Valuation Office to make mistakes in the process. These mistakes can have a significant impact upon you and your business. Therefore, it is important that your property is classified correctly.
It’s a little known fact, but every ratepayer has the right to challenge their business rates bill at any time between the revaluation periods. There is an important caveat however: You only get one opportunity to challenge;
If your challenge is unsuccessful, then you do not get another chance until the next revaluation period – which could be several years away. It is therefore imperative that you maximise your chances of achieving success through an appeal, and hence save money, by seeking expert help and advice from a professional surveyors such as SJ Associates.
If you think your property will fall into this new threshold when revalued, please get in touch and one of our surveyors will be more than happy to assist you.