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Business Rates Revaluation: How the system works

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Small firms will soon be notified of the proposed rateable value on their premises. Rianda Markram outlines how the system works and what to do if you disagree with the decision

Most non-domestic properties need to pay business rates. The rates that you pay will depend on the type and value of your premises. Some businesses may get business rate relief.

Business properties are assessed and given a rateable value by the Valuation Office Agency (VOA) in England and Wales and the Scottish Assessors Association (SAA) in Scotland. This value is then listed on the rating list in England and Wales or the valuation roll in Scotland. Councils use the rateable value of a property to calculate its business rates.

The VOA and the SAA issue a new rating list/valuation roll periodically to reflect changes in the property market. The last revaluation was done in 2010 based on hypothetical rental values on 1 April 2008. The next business rates revaluation for England, Scotland and Wales is scheduled to come into effect on 1 April 2017 and will be based on hypothetical rental values as at 1 April 2015. There is no date set for revaluation in Northern Ireland.

The VOA is sending out questionnaires to ratepayers seeking information such as your rent cost, any sub-lettings and any changes to your property. In Scotland you may receive a similar request for information from the SAA. You can complete the forms online or post them to your local VOA or SAA. We expect the draft rating list for England and Wales to be available online from 30 September 2016. In Scotland we expect the new valuation roll to be available online in January 2017, but in any event the new ratings will not take effect until April 2017.

The council will not send out paper copies, so ideally you should register your email address with the VOA. If you find any factual errors, inform the VOA. If you are doing anything that may affect your rateable value, we suggest that you speak to the VOA, the SAA or a rating specialist such as a surveyor.

From April 2017, there will be a new process for challenging the rate decided upon in England and possibly Wales. It’s likely to involve a three-stage process, as outlined here.

Check: Start by checking all facts are correct. If there are errors, inform the VOA. Agreed errors should be corrected quickly but if the facts remain in dispute, go to the next stage.

Challenge: This stage allows you to challenge your rateable value by setting out your reasons with supporting evidence and suggesting an alternative valuation. The VOA will assess the evidence and (1) accept your challenge and amend the rating; or (2) decline your challenge; or (3) request further evidence.

Appeal: The final stage allows for an appeal to an independent valuation tribunal. Based on the evidence provided, it will either grant or decline your appeal. It may also decide on a revised rate other than your suggestion.

The Government has announced measures to assist small businesses with this process, including: a fast track through the system; guidance on using the three-stage system without professional support; and a lower level of fees for making an appeal – to be refunded if an appeal is successful.

If you are a ratepayer in Scotland and you don’t agree with your rateable value, discuss your concern with your local Assessor. If this does not resolve the issue, you have a right of appeal to the local Valuation Appeal Committee or, in some cases, to the Lands Tribunal and, if the matter is still not resolved, to the Lands Valuation Appeal Court. We expect the introduction of a deadline of 30 September 2017 for appeals against the new rateable values in Scotland.

In the past, the Government has introduced a transitional relief scheme to mitigate the effect of a potential increase in rates liabilities overnight. We will keep you updated.

Rianda Markram is a commercial professional support lawyer at LHS Solicitors, FSB’s legal services provider. If you have a legal query, call 03450 727 727 or visit fsb.org.uk/benefits