Business rates advice needed

[Xantilor]

Hi, new member here hoping you can help. I'm a jeweller, and in 1988 I bought a workshop in Hoxton, London, 800 square feet. My rateable value used to be £4,500, and for many years small business relief meant I paid no business rates. Now my rateable value has shot up to £16,500, meaning the property is no longer eligible for relief and once transitional reliefs are over, I face an annual bill of about £8,000. There's not a lot of profit in designing and making jewellery (bet none of you can name a single designer jeweller?) so I'm panicking a bit.
I've been advised to do Check and Challenge in the hope of reducing the valuation. Should I do this myself, or use a specialist surveyor? I'm considering Altus Group, who do not charge upfront, but charge a fee of 45% of any rate reduction they manage to obtain until 2021.
Any thoughts would be welcome.

 

[kulture]

That fee is huge, have they also mentioned that when you appeal the rate may go UP.

It is worth getting quotes from other surveyors regarding doing an appeal on your behalf. It is also something you could do yourself. The only caveat about doing it your self is that you may miss a material fact that will affect the valuation. That said some of these valuation appeal companies may also miss material facts etc.

There are only a few grounds on which to appeal.
1 a matter of fact. If your valuation notice says your property is x sq ft and in fact it is less then this is a straight forward difficult to get wrong appeal. Also note that areas like toilets, staff kitchen, storage rooms etc can often be missed in the valuation and if correctly stated may significantly reduce the area down as the main use.

2 Class. Your valuation is done using a class of use. Sometimes called a scheme by the Valuation office. If for instance you have been valued as retail wheras it is just a workshop then if you can get them to change the use to this lower rate then this too will save you money.

3 Comparison with similar properties around you. Look at the valuation of all the similar nearby properties. Is yours the same rate per sq ft or more. (if less then consider not appealing!)

4 Special circumstances. Is your property in a slightly worse location, strange shape, extra steps, or other significantly poorer feature than your similarly rated neighbours?

It may be worth getting all your neighbours together to all appeal if you think that they have missed a general overall factor that will reduce the rates.

The thing to bear in mind at all times that a re-valuation can mean an INCREASE in rates.

 

[Xantilor]

Thank you for those ideas, kulture. The (small) toilet has been included when I don't think it should have been. I think maybe the polishing shop, only used for machine polishing, could be removed, but the kitchen area hadn't occurred to me so I could try that. The class is 'workshop and premises' - not sure what 'premises' covers. My workshop is actually less nice these days since a huge hotel was built at the back of my building with six noisy kitchen fans and a rooftop bar.

I had no idea of what fee is usual. I'll look around for further quotes. A Hackney rates person told me that business rates don't often go up after appeal, but I don't want to be the exception to that...

 

[rach88]

Hi, I'm a business rates surveyor (not London based). For comparison we charge 25% of savings.

Altus Group are a reputable firm but that is quite a high fee. Make sure that any quotes you get are from reputable firms (ideally Regulated by RICS - https://www.ricsfirms.com/) - there are some cowboys out there.

Business rates are based on the rental value of the property at the antecedent valuation date, currently 1 April 2015. I note that you own your property rather than rent, but do you have any neighbours with similar properties you could ask how much they are paying in rent, and whether they had any rent free periods or similar? You can then find their assessment on the VOA website and see how the rent compares to their RV, how much it works out per square metre, etc.

Workshop and premises just means 'workshop'. The 'premises' bit is meaningless.

Do you have lots of customers coming to your workshop? If so, I might be a little concerned that the VOA might decide your use is a retail one and try and assess you on that basis. Those sort of risks are the things a rating surveyor should check before appealing (along with the floor areas and other factual matters) to minimise the chances of your RV going up.

Re the floor areas, definitely worth checking these. However, as you have been assessed as a warehouse your unit will probably be measured on a gross internal area (GIA) basis which means that the all areas including toilets, kitchens etc will be included, so long as they are in your sole occupation.

I don't suppose you share part of the unit with another occupier, do you? Could you sublet part of the workshop to another business? Then you should be able to apply to split the assessment and may well both get small business rate relief. You would have to each be genuinely in occupation of your respective parts.

 

[Xantilor]

Thanks, rach88. I have few customers who come to the workshop - probably not one a month. I work here alone, and it's not possible to split the property given the layout, alas. Isn't a warehouse different from a workshop? I make things rather than store them.

I'll check out the RICS website and make enquiries of one or two surveyors listed there re fees.

 

[rach88]

Sounds like the retail element (customers coming to the door) is most definitely ancillary then, so you're safe on that front.

Sorry, typo - meant to say workshop - though the VOA do treat the two classes somewhat interchangeably.

 

[Xantilor]

Are offices in the same group? I use part of the premises as an office, and wouldn't want to end up paying more because of that.

 

[rach88]

If the majority of the space is workshop, the property will be valued on that basis but any offices will have an uplift of 10% or 20% applied to that area.

 

[Xantilor]

Eek. That's certainly worth factoring in to my deliberations.

 

[Stedurham]

Do it yourself they will come out and value it don’t pay someone for nothing did mine and I’m
Now free also

 

[Xantilor]

Stedurham, that's interesting - can you give more details? What grounds did they reduce the rates on?

 

[Stedurham]

If you Google it all business rates have been reduced Stockton high street used to be about 10k that you paid now it's free
If you have storage make sure it's down as storage pm me your post code and address and I'm have look when get min for free lol

 

[Stedurham]

We'VE GOT 5 Shops in towns now free on business rates

 

[Xantilor]

Thanks Stedurham, that's kind. I've pm-ed you with my property details.