Office rental - minimising business rates

[sands67]

I have an office to let, the rent is £18,000 a year. I have had an offer but they want to pay £12,000 a year and also pay a £1500 a quarter "service charge to make up the difference. So as a small business (which they are) they can get rates reduction which would be significant to them.

There would be a small service charge to cover utility increases normally as part of our tenancy agreement.

Any implications for me from a legal point of view if I agreed to do this, any downsides in terms of my ability to collect rent/payments from them?

 

[japancool]

The rateable value is set by an assessor surely, rather than the rent they pay?

 

[Dave Boatman]

What’s the current rateable value of the property?

 

[Paul Kelly ICHYB]

As mentioned, the rates are based on the rateable value which is set by Valuation Office Agency (VOA).

 

[sands67]

Thank you all, that's how I understood it. I can only assume that he has based it on reading he'd get 100% discount on a property that is £12,000 a year and perhaps misunderstood

 

[Paul Kelly ICHYB]

That's normally the case!

 

[makeusvisible]

If you speak to the council they should be able to advise the rateable value, and thus if they would be eligible for small business rate relief. As a side note, if this is a second office for them, that can impact eligibility.

As above. The price you charge your tenant has no bearing on if your tenant can claim small business rate relief (or not).

 

[Paul Kelly ICHYB]

Councils aren't always that helpful - go to the horse's mouth!

Find a business rates valuation

How to find the rateable value of a business property: compare it with other properties and challenge your property’s rateable value if it’s in Wales.

www.gov.uk

 

[sands67]

He seems to think he won't qualify for the discount as a tenant?

 

[japancool]

He seems to think he won't qualify for the discount as a tenant?

He's wrong.