Stephen Nelson - Business Rates

'' Stephen has represented our company for the last 15 years on lease renewals, rent reviews and business rate appeals on our properties Durham County, including Newton Aycliffe, Spennymoor and Peterlee. He has always given us a 100% commitment in keeping our annual outgoings to a minimum''
B Taylor, Managing Director, Taylors Newsforce, Spennymoor

There have been significant increases in Rateable Values in the North East compared with 2000 Revaluation levels, as under:

Transition
To minimize the impact on the increases in Business Rates from 1st April 2005, the Transitional system is still maintained, which effectively limits any increase to 12.5% plus inflation of 3.1%, giving a figure of 15.6% for RVs above £15,000.

(From 1st April 2006 it will be 17.5%; 1st April 2007 – 25%; 1st April 2008 – 25%; with no Transition for the final year 2009.)

For small properties (below RV £15,000) the limit is 5% plus inflation of 3.1%, giving a figure of 8.1%.

(From 1st April 2006 it will be 7.5%; 1st April 2007 – 10%; 1st April 2008 – 20%; with no Transition for the final year 2009.)

If your Rateable Value has actually gone down from 2000, the reduction will still be limited, i.e. from 1st April 2005 it will be 12.5% and, allowing for inflation, this gives a figure of 9.4%. This means that Rates will only go down by 9. 4% on 2004 for RVs above £15,000 which have gone down.

(From 1st April 2006 it will be 12.5%; 1st April 2007 - 14%; 1st April 2008 - 9%.)

For small properties (below RV £15,000) there will be a more substantial reduction of 30%, allowing for inflation of 26.9%. They may also qualify for Small Business Relief.

(From 1st April 2006 it will be 30%; 1st April 2007 – 35%; 1st April 2008 – 60%.)

Small Business Relief
This has been introduced to further reduce the Rates liability of small businesses which operate from one property. Below RV £5,000, the relief is 50%; for RV £5,000-£10,000 the relief is on a sliding scale, i.e. RV £6,000 – 40%; £7,000 – 30%; between RV £10,000-£15,000 the rates in the £ will be 41.5p.

In practice a small business will require a RV below £10,000 to receive the benefit on the understanding that the only other property they own or occupy has a RV below £2,200, which covers ancillary accommodation such as Stores, Garage or parking space. Businesses with a number of shop units with RV below £5,000 but above £2,200 will therefore not qualify.

Rate in the £
From 1st April 2005 this has been reduced from 45.6p in the £ for 2004/2006 to 42.2p to include a supplement to pay for the Small Business Relief! However it is a reduction to allow for the increase in rateable values.

Appeal Regulations
There are new Regulations for submitting appeals against the rating assessment from 1st April 2005.

There is only one appeal against the “Compiled List”, which is the RV as at 1st April 2005.
This can be submitted any time over the next five years but it is recommended that it be submitted at least by the end of the rates year 31st March 2006 in order to have it programmed for consideration in 2006.
If there is a reduction in the RV this will be backdated to 1st April 2005 compared with the 2000 Revaluation, where any later appeal would only go back to the 1st April of the Rates year it was submitted.
Further Rating appeals can be submitted following a change in material circumstances, i.e. the opening or closure of a shopping centre; the opening of a new road; the opening of a retail park, etc.
NEW!!! Rental details have to be included in the Rating appeal. This is because the RV is based on rent and the Rent notices requesting rental information did not receive a great response. The information that will be required consists of (i) the amount of rent; (ii) the date of commencement of the rent; (iii) the next review. We will therefore be requesting this information when we are in a position to submit an appeal unless we already have it or your property is held freehold.

for the “Compiled List” entry (i.e. as at 1st April 2005) based on a % of the reduction in the rateable value achieved
Any further reduction achieved due to a material change of circumstances which may occur in the next five years, based on a % of the savings achieved.