Value for Money: Knowing Business Rates

At Forge Property Consultants, we are often asked to survey and assess buildings for valuation. These can be used for sales or purchases, but also to calculate what business rates need to paid. Business rates are charged on non-domestic properties, such as office premises, shops, pubs, warehouse storage, factories, holiday rentals and guest houses. This also includes buildings where only part of the site is non-domestic – for example a shop or office with living accommodation positioned above, or a residential farmhouse with a farm shop attached.

Putting a price on it

The Valuation Office Agency (VOA) calculates the business rates to be paid and the local council issues bills in February or March for the following tax year. You can contact them if you think the ‘rateable value’ is incorrect or out-of-date. Getting the right current valuation on a property is an important aspect of land management and crucial to business rates. Properties are revalued, usually every five years, and the VOA adjusts the rateable value of business properties, to reflect changes in the market. The most recent set of valuations came into effect in England and Wales on 1 April 2017, based on rateable values from 1 April 2015. Buildings in Scotland and Northern Ireland are valued on a different system.

Who’s exempt from business rates?

Certain properties are exempt from business rates and for the rural population, this includes agricultural land and farm buildings (including fish farms). Exemptions also include buildings used for the training and welfare of disabled people, and religious buildings and places of worship. You also don’t pay business rates on empty properties that have been unoccupied for three months (though the rates will have to be paid after this period), while some premises can apply for extended empty property relief (including listed buildings, industrial premises, charity-owned properties and community amateur sports clubs).

Business rates are calculated on the property’s ‘rateable value’ valuation, but business rates may be reduced if your property is eligible for business rates relief. For example, you could be entitled to rural rate relief, if your business is located in a country area with a population below 3,000 people. Further exemptions from business rates include instances where you are running the only village shop or post office (with a rateable value of up to £8,500) in the area, or the only public house or petrol station (with a rateable value of up to £12,500).

If you think the valuation of your property or premises is incorrect, or would like to find out how much the business rates on a prospective purchase would be, our chartered surveyors at Forge Property Consultants are on hand, to offer advice and guidance on all types of surveys and evaluations.

Charles Lawson, Director