How can I reduce my business rates?
- Thread starter Tunster
- Start date
Small business rate relief varies (slightly) from council to council. A phone call will give you the exact rules where you are based. I found the council here pretty helpful on the matter.
Other than that you would have to contest the rateable value. That will spark a review, and the outcome could be better, or worse, than the current situation.
Other than that you would have to contest the rateable value. That will spark a review, and the outcome could be better, or worse, than the current situation.
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Size is not relevant, it's the rateable value that matters.
https://www.gov.uk/apply-for-business-rate-relief/small-business-rate-relief
https://www.gov.uk/apply-for-business-rate-relief/small-business-rate-relief
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I think in some councils size may be relevant, also the shop frontage onto the high street. As mentioned above, you local council is obliged to help you with this and if you explain your situation they will tell you of available schemes. Also, I think there may be different rates for parts of that shop that sell to the public and parts of the shop that are just used for storage for staff use such as loos, kitchens etc.
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Not accurate. Business rates are calculated by the VOA, local councils can apply relevant relief tariffs, but the rates are the same for everyone (in England).
https://www.gov.uk/introduction-to-business-rates/how-your-rates-are-calculated
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Out of the horses mouth:
https://www.gov.uk/guidance/measuring-property-for-rating-purposes
Surveying standard for VOA measurements
Zoning retail properties
Zoning is a standard way of measuring retail premises for valuation purposes. It recognises that the most valuable part of the retail premises is towards the front of the property, nearest the display window. Zoning will not be appropriate for all shops. For example large department stores and supermarkets will not be zoned
Zones explained
Your retail premises is divided into a number of zones:
- each of these zones normally has a depth of 6.1 metres (20 feet)
- the first zone, nearest the display window is zone A
- the next 6.1 metre zone is Zone B and the next Zone C
- the zones will continue back from the front of the property until the entire depth of the retail area has been zoned
- anything after Zone C is defined as the remainder
- the zoned area will include any space created by using non structural walls or partitions
Retail premises come in all shapes and sizes. By dividing a shop into standard zones we are able to take account of these differences when analysing rental evidence. Rental evidence is broken down to a price per square metre per zone. The value of each zone reduces by half as you move further back from the shop’s front. For example The value of Zone B will be half the value of Zone A, Zone C will be half that of Zone B.
There is also a really handy video which covers all of the above at https://www.gov.uk/guidance/measuring-property-for-rating-purposes
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Yes, Surveying standard for VOA measurements.
The VOA will do it, not business owners or councils.
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No one said that the business owner would do it - what I said was that it was measured by internal space and by shop frontage - which is correct - as I said.
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What you said was "I think in some councils size may be relevant, also the shop frontage onto the high street."
It's got nothing to do with councils. Which was my point.
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So according to the VOA the size is important and particularly the shop size and in some councils if you ask them to look at reducing your council tax they will immediately as the VOA to reassess the premises and as you can see from the information - Size matters and the size of the frontage is relevant - so my statement was correct. The council will come down if the shop is the same size they will not reduce your business rates, if it is not they will ask the VOA to come and check it.
This is the last statement I will make on this - feel free to tout otherwise - but the statement was correct. Shop frontage and size are the important things when it comes to setting or reassessing business rates assessment whether through the council or the VOA.
I thank you.
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I really don't care if one of your statements may be accurate, but the first one was wrong, which is what I pointed out.
I do care if you give someone advice that is wrong, if your not sure just say so.
I offer advice based on 30+ years of experience and a level of research, not on what "I think".
If your in retail and paying business rates, you should be well aware of the process and not provide inaccurate statements.
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It was right, as backed up on the Government website information - I have 40+ years experience.
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I totally agree.
This happened to the shop next door to mine. The rates went up, as they do every year it seems, and the leaseholder contacted the council who came down, looked at the property and told him they were not able to put the rates down in fact they were putting them up because since they had taken information on the property years ago there had obviously been a restructuring and he now had more sales space. He instructed a local Surveyor, the VOA were advised and his rates went up again.
That surveyor came into my shop (as it was next door and of the same design) and used my shop as the comparison.
The problem was that the original information the council had on the shop was exceptionally old, since that time an additional display window had been put in the side of this corner shop and a store room had been removed to give it more sales space. When the guy took on the lease he could not have known that or that the council information was even older than his lease. When his lease ended a year later he simply moved to another shop in the area that had cheaper business rates.
Business rates are just punishing the high street, it's impossible to compete with online unless some sort of level playing
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Not all the high street has the facility to compete with online.
Because the only way is to be online - and a traditional shop with retail space, shop assistants and a small storeroom is not set up to sell online.
Packing space, packing materials, packing staff - often no room.
There is not a level playing field.
An online store has to compete with the high street that still has the majority of the sales, has the display windows for passing shoppers, has the stuff for people to examine before buying or ask staff about.
There is not a level playing field. There are however multiple customer demographics.
Online and high street target different groups.
Was after a new suit last year. Shopped on the high street for the suit, shopped online for the shirt. Two different needs met by two different shopping methods (hard to get 22 neck shirts near me on a Sunday afternoon).
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I was campaigning to get business rates reduced for the high streets around my shop which were struggling and, in order to get the matter raised in the houses of commons at question time, (which it eventually was) I went shop-to-shop down two of the high streets and what they said to me was that to get to a level playing field with the internet they needed two things, firstly a large reduction in business rates (which is normally the second biggest outgoing of a retail store after rent) and secondly acknowledgement by the local council that high streets needed free short stay shopper car parking. Huge opposition to pedestrianised areas because they stated that most of their customers found them whilst they were driving through on on the bus.
It's funny how it goes, because I often struggle to find my size online which is size 5 shoes and size 10 womens clothing. What I normally find when I shop online is that they don't have them in stock. Oddly enough there is an adverting link to a store on this website which I just LOVE (knitted goods and such) but they rarely have any of my sizes when I check). On the reverse side of the coin the local opticians is getting in a number of frames for me to try (ones which have a set of sunglasses that clip on to the front) so on this front the high street has worked for me where online would not - also they can mould the glasses to suit once I buy them. If they had lower business rates they might be able to lower their prices and as a result get more custom.
Clearly, it's a big question with a lot of views.
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I do so hate the "i'm right and you're wrong" arguments.
The facts are that the local council is responsible for collecting the rates. The local council can in some circumstances (e.g. charities) decide to give say 50% or 100% relief on rates.
HMRC set the rate charge, which is the rate multiplier set to the rateable value which determines the rates due. There is a smaller multiplier for small businesses.
If the rateable value is below £12,000 AND it is your only property then you get 100% relief. The local council has no say in this.
Your rateable value is set by the VOA. They use the size of your shop, its shape, and location. As described above they will normally use the Zone A,B,C method. It is normal for your rate per sq ft to be the same as your neighbour's rate.
If you want to reduce your rates you appeal to the VOA. They will come and look and your RV may go up or down or stay the same.
You can look up your current RV and how it is calculated on the VOA web site.
If they have made an error in measuring your property, this an easy appeal and most likely to get a result. If you have an unusual shaped property, or internal steps mid zone A (say) you MIGHT be able to argue a reduction in the zone A rate from your neighbours. This would best be done by a specialist agent.
If you have done internal alterations, like for instance increasing the size of your staff kitchen, or office or store room, and reduced the retail space, then you have good grounds to appeal.
Arguments about the rate per sq ft set due to your location are best left to the experts. The very last thing you want is for your shop AND ALL YOUR NEIGHBOURS getting a rate increase because the visiting VOA valuer thinks that they are undervalued. You would not be popular if your appeal kicked off this process.
If anyone is considering taking on a property, then "not knowing about space changes" is a poor excuse. The VOA website is open to all, and it specifies exactly how much retail/storage/office/kitchen space is in the property according to their records and what the rate is for each space. The Local Council does not keep such records. They rely on the VOA.
The facts are that the local council is responsible for collecting the rates. The local council can in some circumstances (e.g. charities) decide to give say 50% or 100% relief on rates.
HMRC set the rate charge, which is the rate multiplier set to the rateable value which determines the rates due. There is a smaller multiplier for small businesses.
If the rateable value is below £12,000 AND it is your only property then you get 100% relief. The local council has no say in this.
Your rateable value is set by the VOA. They use the size of your shop, its shape, and location. As described above they will normally use the Zone A,B,C method. It is normal for your rate per sq ft to be the same as your neighbour's rate.
If you want to reduce your rates you appeal to the VOA. They will come and look and your RV may go up or down or stay the same.
You can look up your current RV and how it is calculated on the VOA web site.
If they have made an error in measuring your property, this an easy appeal and most likely to get a result. If you have an unusual shaped property, or internal steps mid zone A (say) you MIGHT be able to argue a reduction in the zone A rate from your neighbours. This would best be done by a specialist agent.
If you have done internal alterations, like for instance increasing the size of your staff kitchen, or office or store room, and reduced the retail space, then you have good grounds to appeal.
Arguments about the rate per sq ft set due to your location are best left to the experts. The very last thing you want is for your shop AND ALL YOUR NEIGHBOURS getting a rate increase because the visiting VOA valuer thinks that they are undervalued. You would not be popular if your appeal kicked off this process.
If anyone is considering taking on a property, then "not knowing about space changes" is a poor excuse. The VOA website is open to all, and it specifies exactly how much retail/storage/office/kitchen space is in the property according to their records and what the rate is for each space. The Local Council does not keep such records. They rely on the VOA.
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Local village I take the dog to be groomed in, has some free short stay (up to 2 hours) parking spaces near where I want to go. Hit and miss whether there are any, spaces can be gone before the car in it has even started reversing with people blocking traffic so they can pull into space soon as its clear.
Letting the car already there out appears sometimes to be an afterthought. Great when can bag a space, shortage of spaces by a couple of hundred. There's 12.
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Your village needs 212 car parking spaces?Local village I take the dog to be groomed in, has some free short stay (up to 2 hours) parking spaces near where I want to go. Hit and miss whether there are any, spaces can be gone before the car in it has even started reversing with people blocking traffic so they can pull into space soon as its clear.
Letting the car already there out appears sometimes to be an afterthought. Great when can bag a space, shortage of spaces by a couple of hundred. There's 12.
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Difficult to reduce your rates without moving to another premises. Although you might change your shop front, it won't effect the retail zoning. In a past job, we had VOA down to re-evaluate our premises, and I discussed putting in walls as part of the premises was no longer used for retail so we would have made the retail area smaller, but unless it's a structural wall it would have made no difference. Business rates are an antiquated tax on the high street that need to be addressed. They government has given some reduction this year, but it's too little, too late.
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You know what would happen if they reduced rates by simply adding a wall and cutting down on shop space?
5 minutes after inspection the wall would come down and trading carried on in that space with reduced business rates overall.
Yes they need a complete revamp, start from beginning and do a better system rather than fiddle with the current system.
Alternately cancel them altogether and increase other taxes to compensate.
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The reason they won't do that is because they would then have to increase council tax, and a low council tax rate get them votes from the populous. The last scheme I knew of was when the conservative government advised local councils that business could apply for a 50% reduction in their business rates (the government would then pay the local council that 50% on behalf of the business). The labour council we were in didn't put it into force or advertise it - the reasons were unclear and they deliberately muddied the water about the scheme. Some of us who knew about it did force them into a position of putting it into force, but it still meant that most of the businesses in the area would have been unaware of it.
Perhaps what would really help is if business rates were handled by central government rather than being a cash cow for the local authorities.
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