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.......Article > Could You Save a Packet on Your Business Rates?

 


Article kindly provided by

www.eddisons.com


Running a business at any time can be difficult, but it is especially so in the current economic climate. Many start-up businesses are struggling to make it beyond the critical first few years, as they seek to establish themselves in the market. Even those that have been around for longer are finding things difficult and several widely recognised names have been forced to shut their doors in the years since the credit crunch hit.

Monitoring overheads
In order to give your business the best chance of survival it is essential to review every overhead to see where savings can be made. The three most costly business outgoings tend to be staff, rent and rates. Considering staffing levels and negotiating rental costs are obvious moves that most businesses will take to reduce overheads. However, many will accept their business rates without question. This may be a major oversight and it could be that you are able to make significant savings by making an appeal for business rates relief.
Getting into the murky waters of business rates relief may initially seem quite daunting and puts many off looking further into the option. However, once you dip your toe in, you will find that the processes involved aren’t actually that complex. In addition, if you are struggling, you can lean on expert assistance to help aide your cause.

 

Understanding business rates calculation
Before we move on to how you can lodge your appeal, we should first consider how your business rates calculation is made. The calculation can only be done once you know what the ‘Rateable Value’ of the businesses property is.

The ‘Rateable Value’ is decided by the Valuation Office and is an estimate of what it should cost to rent the premises for 12 months. This figure must then be multiplied by the Uniform Business Rate (UBR). At time of press, the standard UBR for England is 45.8p. This is slightly reduced for small business to 45.0p.

If you aren’t too great at maths then we have provided you with a few examples to act as a guide.

Normal business calculations:
Annual Rent x UBR = Annual Business Rates

£20,000
45.8p
£4,580
£12,000
45.8p
£5,496
£15,000
45.8p
£6,870
£20,000
45.8p
£9,160
£25,000
45.8p
£11,450
£30,000
45.8p
£13,740
£40,000
45.8p
£18,320
£50,000
45.8p
£22,900


 

Small business calculations:
Annual Rent x UBR = Annual Business Rates

£20,000
45.0p
£4,500
£12,000
45.0p
£5,400
£15,000
45.0p
£6,750
£20,000
45.0p
£9,000
£25,000
45.0p
£11,250
£30,000
45.0p
£13,500
£40,000
45.0p
£18,000
£50,000
45.0p
£22,500

It is worth bearing in mind that the ‘Rateable Value’ or a property is reviewed every 5 years. Any fluctuations will of course result in a rise or fall in your business rates. We should also point out that any increases to the UBR may be introduced over a period of time. As a result, your business rates calculation could be a little more complicated. An example of this being that the Government made it possible for businesses to defer 60% of an increase in 2012/13, which is then to be paid equally in the following two business years. This is commonly referred to as Transitional Relief.

 

Making an appeal
The fact that business rates rely on a calculation that factors in a property’s rental value put in place by the Valuation Office means that they are open to interpretation. This means that if you do not agree with the annual rental estimation you can appeal against the figure. You should take into account any changes that may have impacted on the Rateable Value, such as a fall in the price of property in the local area.

Some other factors which may impact on the Rateable Value of your business property are:

• If the property is stood empty or is only partially occupied
• Major building or road works in the area which are impacting on business
• An increase in competition in the local area

If your business has been affected by any of the above, or you simply feel that the Rateable Value is set too high, you could have grounds for an appeal. The best route now is to seek out some additional information and guidance from a Chartered Surveyors that specialises in business rates relief. They will be able to review your case and, drawing upon their knowledge of the local area, advise as to whether they believe you have proper grounds for appeal.

Non-traditional business or organisations
As a final point, we’d like to make your all aware business rates relief appeals aren’t only open to traditional business properties, such as retail shops and offices. Pretty much any business can apply to have their business rates reviewed, including restaurants, gyms, hotels and nightclubs. Likewise, not for profit organisations, such as charities, schools and universities can also lodge an appeal.

 

 

 

Eddisons is a leading firm of Chartered Surveyors. Founded in 1844, we have over 160 years of experience in the industry. As innovative, experienced, multidisciplinary Chartered Surveyors, we pride ourselves on offering a range of services to banks, insolvency practitioners, owners and occupiers of commercial property. Our clients can take advantage of our integrated solutions either as one-off projects or, on an ongoing basis for more complex property requirements. We work around their needs and budgets to create the very best property solutions.

 

 

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