Rating

You will generally be liable to pay business rates if you occupy business premises. Business rates are a tax based on the rateable value of the property, which reflects its rental value at a given date. The rateable value can, however, be challenged.

Jones Granville provides a rating service and general advice on procedures and appropriate courses of action to reduce liability including an understanding of transitional relief and adjustments.

Rating is complex and Jones Granville’s expert advice ensures the best rateable value is negotiated on your behalf. We know the system and our knowledge and experience will help you to save money.

YOUR BILL – HOW IS IT CALCULATED?

Similar to your income tax, it is calculated by measuring:

Income x Tax Rate

For business rates, it is:

Property Value x Rate in £

WHY IS 2017 IMPORTANT FOR BUSINESS RATES?

Because in 2017, both your Property Value and Rate in £ will change.

WHAT WILL THE RATE IN THE £ BE?

The Government will confirm later this year. However, they have already said they will stick with the plan to raise the same amount of money from rates as the year before, so if the total Property Value goes down, the Rate in the £ must go up.

Our prediction is the total Property Value will go down (see Winners and Losers below) so the Rate in the £ will go up. Our expectation is that it will increase to 54p in the £ (up from 49.7p). This will be the highest rate ever.

YOUR PROPERTY VALUE

This is assessed as the Valuation Office’s opinion of the value of your property on 1st April 2015. If your Lease started around that time, it will give a good indication of what the Property Value (called ‘Rateable Value’ or RV) will be on your rates bill. It’s a little more complex, but it’s a good guide. 

The 2017 rating revaluation will see both ‘winners’ (whose bills will go down) and ‘losers’ (whose bills going up) in all property sectors.

THE WINNERS

The winners are predicted to be regional retail occupiers in cities such as Leeds (-40%), Glasgow (-30%), Bristol (-20%), Cardiff and Newcastle (both -15%).

THE LOSERS

Most of London. Some prime retail areas like Bond Street could see a 100% increase. Offices in Stratford could rise by 80% and Shoreditch by more than 40%. Mayfair & Soho will be less badly affected but could still see rises of 12% and 20%.

OTHER CHANGES

Will the system which limited increases (and decreases) be abolished? It has been in Scotland and Wales and it may be England will follow suit. Why? Because the Government would rather administer the pain in one go in 2017, so it will be forgotten by the time the Election comes around again in 2020. However, Brexit may have changed the government's mind.

RATES – WILL THEY BE ABOLISHED ANYWAY?

Every Government says they want to abolish or change Business Rates since the Layfield Report in 1974. No one does, for one simple reason: the collection rate is over 98% yielding £26bn a year. That’s because it’s a tax on buildings which don’t disappear easily, unlike moveable assets or people (the income tax collection rate is below 94%)

Winston Churchill once said about democracy that “it is the worst form of government, except for all the others” This is true of the current rates system. So, just like a drug addict, the Government wants to give it up it but is hooked on the regular fix of easily collectable income.

NEXT STEP

Email Gareth or Lydia and we will track your Rateable Value to help you budget for future bills and hopefully reduce the bill itself.