Rateable Value and Rent

[Zuber Ali]

Hi All,

Quick question hopefully. is the rateable value of a business an indication of what the rental value of a business is.

I.e rateable value of a business is £13000, does this mean I should be negotiating a rental value with the landlord around this figure.

regards

 

[Maz]

No ,
Depend on so many factors you’ll get discounts from council ,
Best practice is to call them and ask the actual figure you will pay
If you limited company or sole trade will change how much you pay as well as the size of your shop ( by means of costumer area etc... Depend of your post code I’ll think it will be around £2k

 

[Zuber Ali]

thanks maz, not quite clear on what you mean or if you misunderstood me. I understand the rateable value is used to calculate business rates with a discount applied for small businesses, i.e £13000 x 0.466=£6524, then I pay a percentage of this.

what I am asking is whether the rateable value can be used as a guide for what I will negotiate with the landlord for rent.

 

[billmccallum1957]

Rateable value is based on the value of the property.

I know of at least one shop here in Middlesbrough where the RV is £35,000 and the rent is £25,000.

 

[rach88]

Broadly speaking yes, rateable values are based on rental values.

However, the RV of a property is not necessarily an accurate guide to its rental value for the following reasons:

- they are currently based on rental values from 1 April 2015 so would be nearly three years out of date as a guide to value.

- they are calculated assuming the property is let on a hypothetical full repairing and insuring lease, for a 1 year term with a reasonable prospect of continence, and assuming the property is in economic repair. So, if the property is actually in disrepair, its rental value may be lower than the RV. On the other hand if you negotiated say a schedule of condition so you did not have a full FRI lease, the rental value may be higher than the RV.

- the VOA can get Rateable Values wrong. Valuation is not an exact science. There is a whole industry built up around appealing your RV on the grounds it may be too high. This goes both ways and some properties will be under assessed.

 

[Toby Willows]

If you limited company or sole trade will change how much you pay as well as the size of your shop ( by means of costumer area etc... Depend of your post code I’ll think it will be around £2k

Being Ltd or Some Trader will have absolutely no bearing on the what will be charged.

£2k eh? What’s that for, a shoe box in the middle of a field?

 

[Toby Willows]

”Sole Trader” darn auto correct

 

[Noah]

”Sole Trader” darn auto correct

...and it ruined the shoe box joke.