How are business rates calculated?

[Tombo46]

I have recently had a couple of shop keepers on my block tell me they don't pay any rates. I figured that it was just a set amount and when they calculated it that it would be correct however I'm having second thoughts now. I had a look in to it but can't seem to find any information online regarding how they calculate your rates. It must vary from business to business and not be as straight cut as being charged per Square meter because premises that are larger than mine have a smaller rateable value. This is my block of shops...

http://www.2010.voa.gov.uk/rli/en/basic/find/select

Mine is 302 Twentywell Lane at 72.3 Square meters and a rateable value of £8900 whereas the shop up the road at 104.6 square meters has a rateable value of £8500 despite being considerably larger. I was wondering what they take in to account? I figured you must pay more for your shop floor in relation to your "back rooms" however the larger shop has a much larger shop floor.

If anyone could point me in the direction of any information relating to this I'd much appreciate it.

Cheers!

Tom

 

[movietub]

I have recently had a couple of shop keepers on my block tell me they don't pay any rates. I figured that it was just a set amount and when they calculated it that it would be correct however I'm having second thoughts now. I had a look in to it but can't seem to find any information online regarding how they calculate your rates. It must vary from business to business and not be as straight cut as being charged per Square meter because premises that are larger than mine have a smaller rateable value. This is my block of shops...

http://www.2010.voa.gov.uk/rli/en/basic/find/select

Mine is 302 Twentywell Lane at 72.3 Square meters and a rateable value of £8900 whereas the shop up the road at 104.6 square meters has a rateable value of £8500 despite being considerably larger. I was wondering what they take in to account? I figured you must pay more for your shop floor in relation to your "back rooms" however the larger shop has a much larger shop floor.

If anyone could point me in the direction of any information relating to this I'd much appreciate it.

Cheers!

Tom

There are lots of criteria, it's all available via local council and .gov websites.

Often if there is an illogical difference between two premises it means one or the other has changed in some way since it's last rate review. Change can be anything from use change to building work and extensions. For example if a 'shop' was primarily used for storage, it could be argued a usage change should force a recalculation of the rates.

The problem is, when you ask for a rates review, you could find out that your rates go up. Mayve the other shops should do too, even more so - you wouldn't know until both shops are reviewed again.

I believe you can petition for the other shop to be reviewed - but this seems a bit mean if they're getting a bargain!!

It's hard to have any sympathy for what's truly fair and honest when it comes to business rates. I'm always happy to see someone get a bargain. It's not like you get anything for your money, not when compared to council tax for a house which at some point a long time ago was the equivalent.

 

[rach88]

Rates are calculated based on the rental value of your property as at 01/04/2008. In valuing shops the Valuation Office Agency uses the standard method of assessing their rental value - zoning. They have a video which explains this,

. The idea is that the part of the shop floor nearest the street is the most valuable. You have a larger frontage than your neighbour, who has a long, thin shop. So this explains part of the difference in your valuations.

However, I see that your neighbour has also had his Zone A rate discounted from £185/sq m to £158.18/sq m for some reason. This may reflect some particular disadvantage which his shop suffers from, but yours does not. It is difficult to know what this might be without asking the Valuation Office.

Unless you have very recently taken over the shop I note looking at the VOA website that you have a particular firm of rating consultants acting for you (The Coupers Partnership). How is that going for you? Have you spoken to them about this? They have already appealed your valuation but nothing came of this, and so you now cannot appeal again unless something changes. They have put in another appeal on the ground of a material change of circumstance (have there been any roadworks in the street outside, something like that?) and that appeal is still outstanding.

Some of your neighbours may not be paying anything because they have a rateable value under £6,000 and benefit from small business relief. This relief tapers off between £6k and £12k in rateable value and you shouldn't be paying a great deal, so long as you qualify for small business rates relief (and apply to your local authority - it isn't granted automatically). Do you benefit from the relief?

 

[Tombo46]

Thanks a lot for the reply. Seems you know more than I do haha. I didn't realise but on the link I gave I can actually click on my property to expand on the details. I also notice my rateable value went up considerably from 2006. This may just be down to natural inflation etc but seems like a lot. One other thing I noticed is "Retail Zone B" which is actually a working area where we make flowers up etc and is not part of the main shop floor so they may have made a mistake there which would be worth contacting them about.

The company you mentioned "guaranteed" me a rate reduction over the phone and being newly self employed I believed them. Paid £500 and they put an appeal in which is something I could have done myself. Lesson learned there!

As for road works. We had major disruptions in 2013 for weeks which saw our takings drop by about 50% during this time. It also had a knock on effect and we lost some pretty good customers due to them getting in to new routines etc. We were also given no notice before they started. Long story short, if it wasn't for a loan from one of my family members our 30 year old business would have gone bust.