Business rates

[John85]

Hi,

I am wondering if someone can help me. We have always rented serviced offices where business rates are included but now we are planning to move.

I have been in touch with the local authority about business rate liability and they advised me the amount due for the year would be £648.

Then they advised me the property is subject to transitional relief which is £559.

Does this mean I have to pay both, or just the transitional relief?

Thanks in advance!

 

[Nord20]

I may be completely wrong, but 'relief' sounds more like a discount (probably for a small business/premises - the rate is quite low, so I'm assuming it's not a huge premises) - double check, but it sounds like your rates are going to be just a few quid!

 

[John85]

I thought that too, Nord20, but I did not want to presume!

Not a huge place, only 920sq ft. The RV is £7200.

 

[Nord20]

In that case, yes, you should be looking at a discount off the rateable value. I think it's usually referred to as small business relief, so I'm not sure what transitional relief is - from the name, I would assume it is only available for a short period.

I would also ask for a rate holiday when you first move in for your build-out - no harm in asking!

 

[John85]

I asked the council to clarify and to be honest I am still confused!

No, transitional relief is a "capping" mechanism that reduces the amount a rate bill can increase by year-on-year. In the case of this property, instead of the annual charge being £3240.00 it is capped at £2799.57 so you benefit from a reduced charge.

If we do the same calculation as before, based on an occupation date of 01 Aug, the charge would be £559.91 / 365 days x 243 days = £372.76.

 

[Nord20]

Ok, so what they're saying is that using the 'normal' way of calculating your rates, it would come to £648.

The transitional relief is actually a cap, so your rates for this year are capped at £559 - so you're getting £89 off your bill for the year.

But, as your tenancy started on the 1st August, the pro rata rate (i.e you are not in there for the whole financial year) comes to £327.

This is astonishing good. We pay over £1000 PER MONTH for a premises just over 2500 square feet!

 

[John85]

wow, that is a lot. Currently we do not pay anything as they are included in our lease but we have decided to move to our own premises.

Even paying the rates its working out slightly cheaper as these managed offices are very expensive!