Busines rates (another tax)

[cqueen]

As a newbie, I've been looking into the cost of renting a small commercial unit.

Over the phone the estate agent said that for what I need, the lease will be around £8k/year. So he sends me a few brochures and one of the says...
'We have been informed that the unit has a rateable value of £8,000 for 2005/2006. Please contact concil for rates.

Now, is this the cost of the property or the cost of the rates?

[Promo Pen People]

I was wondering the same thing myself as I have been looking at leasing some commercial property in the UK.

The rate of tax will be applied to the year's rent from what I understand. It makes no difference to whay you pay in rent. What matters is the value that has been assesed by those money grabbing *&*&*&*&*s.

Just because the reteable value is 8000 pounds, that doesn't mean that you have to pay the same rent. Try to get some sort of discount if you're not in a prime area.

[winton50]

The reateable value is a nominal value set during the rate revaluation which I believe has to be completed for every property every five years.

this takes into account things like rent payable, property value, popularity of the area and any government initiatives such as encouraging growth in deprived areas etc.

You will then pay the multiplier which is I think 44.3p in the £ for this year to 31/3.

so multiply your rateable value by your 44.3p and that's your rates payable. You then reduce this by taking off any revaluation allowances or local govt allowances for specific industires so similar to above if your local council wants to encourage high growth pen manufacture you may get a reduction.

Call your local council revenue and benefits section and they will be able to tell you exactly how much is payable and if there are any reductions available.

Incidentally the rateable value and the rent are almost entirely seperate. The rent is set by the landlord and is frankly what someone will pay - so if you have a unit that has been empty for a long time then you haggle - hard!

go for things like rentfree periods, fitting out reductions etc etc. If the unit isn't that desirable then don't go paying the landlords legal fees.

stu

[Alpha]

Yes it is another tax but in the same way that you pay council tax on a residential property.

There are two rates in effect

1) the small business rate which I would think you would fall into which is set for 2006/7 at 42.6p

2) The standard rate which is 43.3p.

As a small business with a rateable value under £10k you will be eligible for small business rate relief (but dont hold your breath on the amount).

Eligible businesses with a rateable value below £5k get a 50% reduction. This reduction is lowered by approximately 1% for every £100 of rateable value between £5k and £10k.

These rates are in addition to the landlords rent as stated.

Everything else that Stuart has said still applies in respect of negotiating with the landlord :D

[visagephoto]

I think you'll find that you may also have to pay water rates on top of everything else. Apparently this applies even if you don't have water facilities in your premises.

[cqueen]

so say the rent is £8k. <roughly> how much am i gonna be paying on rates? £20? £200? £2000? £5000?!

[Alpha]

You need to read what we have said!!

How much rent you pay has nothing to do with the rates.

if your rateable value is as you have stated £8000

Rates payable therfore will be .426 x 8000 = £3408

Reduction will be 50% -((8000-5000)/100) = 50%-30% =20%

Net rates payable will therefore be 3408-(3408*20%)=3408-681.60

£2726.84

Now you could have done that if you had read the answer
:wink:

[cqueen]

sorry, I just saw lots of words :lol:

Thanks anyway dude

[KM-Tiger]

Now you could have done that if you had read the answer

Dude,

I reckon you have the patience of a saint!