RATES SEMINAR

Graham Birch FRICS

Bolton Birch — Chartered Surveyors

Tel: 01753 830393 

Monday 9th March 2009  

NOTES

Rates Poundage 2009/10 - this will increase to 48.5p (48. 1p for small businesses) from this year’s figures of 46.2p (4.5.8p). The reason for this is since 1990 when local rates abolished, the Government guaranteed rate poundage would rise by reference to the RPI benchmark fixed in previous September.  Rate bills are being prepared and issued now, and despite pressure from major businesses on the government to make a special adjustment in the light of the economic climate, it is probably too late for practical purposes for any amendments to be made. There is transitional relief in some cases which means increases are not paid immediately. If a reduced assessment is negotiated as at 1st April 2005 this will also be phased in over the years. Any transitional relief actually ceases as at 31st March 2009, and for the financial year 2009/2010 rate liability is calculated by multiplying the ascribed rating assessment by the new rate poundage. 

Rights of appeal — If the property has been improved/extended the rates will obviously be increased.  However if you think you have been over assessed it is not too late to appeal. Final date for appeal is 3lst March 2010.

Material Change of Circumstances — This could be caused by something physical and detrimental happening to your property or the locality in which your property is situated e.g. scaffolding next door for a considerable time could be genuine grounds for appeal. Over supply in the area — e.g. large office buildings empty, or an argument that there are lots of empty shops in location — these can create grounds for reduction in assessment. Likewise reduction in footfall in the area or a new shopping centre opening. The reasons for appeal must be physical not just because of the “credit crunch”.  

Small Business Rate Relief  - If assessment is less than £5,000 then entitled to 50% relief. Relief decreases if assessment from £5- £10,000. i.e. £7,500 assessment is entitled to 25% relief. 

Rating Revaluation – Assessments are based on the Open Market Rental Value as assessed by the Valuation Officer. 

Rent Return forms - The purpose of these forms is to provide the Valuation Office Agency with rental evidence upon which their assessments are then based. These are often, due to their complexity, completed incorrectly. E.g. Capital expenditure — This should relate to structural alterations to the shop or the upgrading of facilities – for instance installing air conditioning - not fixtures and fittings you may have introduced. Always get some advice when filling in the form. 

Methods of Valuation - Valued on a rental basis. Price is per sq.ft. Shops are zoned. The first 20’ of the High Street frontage is the highest value and decreases throughout the premises. The exception to this is the leisure business, i.e. pubs etc. which are valued on a quasi  profits basis. It is possible in the case of the majority of commercial properties to obtain from the Valuation Office website the breakdown of the actual valuation.  This will give floor areas, allowances etc. With effect from September or October of this year the Valuation Office Agency will have completed the preparation of the 2010 revaluation and it will then be possible for each commercial ratepayer to ascertain details of his newly ascribed assessment which will be effective as from 1st April 2010.  By Autumn 2010 the Government will will have decided poundage and transitional relief details. It is estimated that on average throughout the UK assessments will not go up by much more than 10% and it is therefore likely that the new rate poundage will be approximately 10% lower than the poundage for 2009/2010.  The likelihood is, therefore, that if an individual ratepayer’s assessment is to be increased by less than 10%, his rate liability in 2010/2011 will be very similar to his liability for 2009/2010.  

SUMMARY In summary the rates should not be too high for the rate payer in the immediate future but do GET ADVICE on filling in forms etc. Money well spent. Don’t be afraid to go for appeal if you feel you have a good case. However, if telephone calls are received by companies saying they will reduce your rates on a “no win no fee” basis, PLEASE ignore them. For the appeals to be carried out properly, a properly qualified Chartered Surveyor is required who will complete the task in a professional manner, and will conduct the appropriate research before providing any advice as to whether the existing assessment appears to be excessive.