There hasn’t been much good news recently for business ratepayers but there is a glimmer of hope for some.
The UK Supreme Court has handed down a landmark decision which means that cost reductions are once again possible for ratepayers in respect of properties undergoing renovation and, therefore, not capable of occupation. Read on for more details.
Business rates are generally payable in respect of empty properties if they’re unoccupied for more than 3 months (or 6 months if industrial). Rates are calculated using a rateable value assessed by the Valuation Office Agency (VOA), part of HMRC, and a multiplier set annually by the Government. The rateable value is based on the annual rental value of the property.
A property undergoing reconstruction isn’t likely to attract any rent. Nevertheless, in February 2015 the Court of Appeal decided that premises undergoing renovation should be considered to be in repair when valued for rating, meaning 100% rates remained payable when properties were, in effect, building sites.
The Supreme Court has now paved the way for ratepayers to successfully seek a rateable value reduction to a nominal value when they are redeveloping a property, and that rateable value reductions shouldn’t have to wait until it’s uneconomical for the property to be reinstated to its original state.
If you would like to discuss the possibility of reducing the cost of your business rates, please contact Helen White, Phil Vernon or your usual PwC advisor.