When it comes to business rates, eyes tend to glaze over. Many property investors take the view that nothing is certain in life but death and taxes; they shrug their shoulders and pass on the bill to their accounts team to pay and file it.
While they aren’t wrong, they aren’t quite right either. Time is ticking down to 1 April, the moment that the 2023 rating list comes into play, and firms have a closing window of opportunity – not only to secure backdated refunds on their business rates from 2017, nor just to secure reduced rates from 2023 onwards, but potentially to try and have their rates liability reduced from 2026.
Business rates are often seen as a secondary concern – albeit a major annoyance – but companies should take a long-term view, and do so today, to reap the benefits tomorrow.
Most property professionals will be aware that the new rating list comes into effect in just a few weeks’ time. From April, business rates bills on your properties will be calculated based on a new valuation. It’s well established who many of the winners and losers will be: industrial and logistics assets will likely see their bills soar, while retail, hospitality and leisure, and secondary offices will be looking forward to something of a reprieve. Whether it’s enough to counter-balance wider inflationary pressures is another matter altogether.
For those big firms and occupiers that have a rating surveyor in place, there’s nothing more you need to do. That rating surveyor is waving goodbye to their friends and family for the foreseeable future and working flat-out to deliver you backdated returns and ongoing reductions in your rating liability.
That rating surveyor is waving goodbye to their friends and family for the foreseeable future
But for everyone else – those who take the approach that paying business rates is a necessary evil and there is nothing to be done – there are potentially big benefits from picking up the phone to ask for advice or looking online into whether you might be able to cut your property’s rateable value.
The Valuation Office Agency (VOA) is continuing to wade through appeals. There is a huge backlog in terms of getting decisions against 2017 rateable values. VOA has had six years to go through 2017 list appeals and it’s not quite there yet.
When it comes to the window between the 2023 and 2026 lists – future rating lists are being reduced to three-year periods – it follows that, at the current rate of appeals, we’ll still be going through 2023 list appeals well into the 2026 list and beyond. Getting into the queue now will make a big difference.
If companies believe they are over-assessed, they should appeal now against the 2017 list. VOA will work through these appeals first, setting property firms up (if successful) to put themselves in the best possible positions for the 2017, 2023 and 2026 lists.
Investors need to move business rates up their priority list. It could make a decade’s worth of difference if they act quickly.
Aoife Broderick is a senior associate at Allsop