Blog | Owner Business Rates
Investors have just weeks left to change a decade of business rates
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, shrug their shoulders and pass on the bill to their accounts team to pay and file away.
While they aren’t wrong, they aren’t quite right either. Time is ticking down to 1 April 2023, 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, in order to reap the benefits tomorrow.
Although the sound you hear is a clock ticking – and rating surveyors up and down the country scrambling to get last minute appeals over the line – the clock isn’t quite as foreboding as that which Vecna employed in the latest series of Stranger Things.
Dividing firms into ‘winners and losers’ of the revaluation isn’t clear-cut
Most property professionals will be well aware by now that the new rating list comes into effect in just a few weeks’ time. From April 2023, 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 the likes of retail, hospitality and leisure, and secondary offices will be looking forward to somewhat of a reprieve (although 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 right now 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. Not all heroes wear capes.
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 to be had in picking up the phone to ask for advice or looking online into whether you might be able to reduce your property’s rateable value.
Why appealing 2017 now means winning in 2026
The simple fact is that 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 we’re still not quite there yet. When it comes to the window between the 2023 and 2026 lists – future rating lists are being reduced to 3 years periods – it then 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 simultaneously 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.
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