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Revaluation - General

Every five years the Valuation Office Agency and Scottish Assessors give all non-domestic (business) properties new rateable values to enable local rating authorities to calculate rate bills. This revaluation is designed to redistribute the tax burden by reflecting changes in property values in the preceding 5 year period. The new rateable values will broadly reflect the annual open market rental value of each property prevailing at the statutory valuation date.

2010 Revaluation

Following the 2010 Revaluation revised rateable values were applied with effect from 1 April 2010 reflecting the rental value of the property as at April 2008. Rateable values for all properties in England & Wales can be accessed via the VOA web site www.voa.gov.uk. The rateable values for Scottish properties can be accessed on the Scottish Assessors Association portal at www.saa.gov.uk.

The non domestic revaluation planned for Northern Ireland in 2010 has been postponed and will not now take place until 2015. The rateable values in Northern Ireland are set by the Land and Property Services www.lpsni.gov.uk

Appeal Rights

Revaluation Appeals
Currently every ratepayer has the right to appeal against the rateable value issued at the time of a Revaluation provided the appeal is lodged within the statutory time limits. In England & Wales one revaluation appeal can be lodged at any time in the 5 year rating cycle. In Scotland the deadline for the submission of a 2010 revaluation appeal is 30 September 2010.

Interim appeal rights also exist in when a ratepayer acquires a new interest in a property or if there has been a change in circumstances (see below).

Material Change of Circumstances (MCC)
In addition to the above, an appeal can be submitted where a change has occurred whether in physical terms to the property or if the amenity has been affected in some way (material change of circumstances or MCC). Such changes may have had a direct effect on the level of value of the property. Alternatively the beneficial occupation of the property by the ratepayer may have been affected to some degree. The most relevant examples are increased vacancy rates, competitor openings, roadworks or general disturbance.

Rate Poundage

The rate poundage, which applies from 1 April in each financial year, is as follows:

  2009-10 2010-11 2011-12
England
UBR 47.1 40.7 42.6
Large Property Supplement (>£18,000 or £25,500 if in London) 0.4 0.7 0.7
Total 48.5 41.4 43.3
Scotland
UBR 48.1 40.7 42.6
Large Property Supplement (>£35,000) 0.4 0.7 0.7
Total 48.5 41.4 43.3
Wales
UBR 48.9 40.9 42.8
Total 48.9 40.9 42.8

Small Business Rates Relief - England

The Small Business Rate Relief Scheme applies to businesses with an aggregate rateable value of all its properties being less than £18,000 (£25,500 in London) and only one property assessed above RV £2,599. The relief for qualifying businesses is show below:

Rateable Value £age Small Business Rates Relief (SBRR)
<£6,000 40.7p 50%
>£6,000 up to £11,999 50% (less 1% per £120 per £1 of RV over £6,000)
>£12,000 to £18,000 No relief but small business multiplier of 40.7p applicable

Small Business Rates Relief - Scotland

On 1 April 2010 the thresholds increased. The Scheme will provide relief to businesses with properties in Scotland with a combined rateable of £18,000 or less. In addition, the Scheme has been expanded and, where the cumulative rateable value of a ratepayers properties falls between £18,000 and £25,000, the scheme will offer 25% relief to individual properties with a rateable value of up to £18,000.

The Scheme provides the following reliefs from 1 April 2010:

Combined rateable value (RV) of all business properties in Scotland: 2010-11
Up to £10,000 100%
£10,001 to £12,000 50%
£12,001 to £18,000 25%
Upper limit for cumulative (RV)* £25,000 25%

*This will allow a business with 2 or more properties with a cumulative rateable value of under £25,000 to qualify for relief at 25% on individual properties with a RV less than £18,000.

The large property supplement of 0.7p (total 2010/11 £age of 41.4p) is applicable to properties in excess of £35,000 RV.

Liability Calculation

The actual rates bill will be determined by multiplying the rateable value by the appropriate rate poundage. However, this may also be influenced in England by transitional relief.

Transitional Relief – What is it?

TR is a financial regulation applicable only in England, which limits the year on year increase and decrease in any occupiers rates liability. Whilst this protects ratepayers from large increases, ratepayers should be aware that the level of increase is less restrictive later in the 5 year revaluation cycle. Ratepayers should therefore take a longer term view on rates payments.

Maximum Increases

  2010-11 2011-12 2012-13 2013-14 2014-15
Small property 5% 7.5% 10% 15% 15%
Large property 12.5% 17.5% 20% 25% 25%

*The above noted figures will also be adjusted by an inflationary amount

Maximum Decreases

  2010-11 2011-12 2012-13 2013-14 2014-15
Small property 20% 30% 35% 55% 55%
Large property 4.6% 6.7% 7% 13% 13%

*The above noted figures will also be adjusted by an inflationary amount

A small property is a property with a 2010 rateable value below £18,000 (or £25,500 within Greater London). All other properties are large properties.

Transitional relief is not applicable in Scotland or Wales

Empty Property Relief

Due to changes in legislation there are now different schemes for the rating of unoccupied property in Scotland and England & Wales.

England and Wales
Prior to 1 April 2008 the criteria for the rating of unoccupied property in England and Wales was broadly the same as the scheme which still applies to Scotland. The Rating (Empty Properties) Act 2007 became law on 19 July 2007 and curtails the rate relief on empty property.

Persons entitled to possession are liable for 100% of occupied liability after three months 100% (six months for industrial properties) relief. There are however limited exceptions summarised below:

  • listed building
  • charities
  • Community Amateur Sports Clubs (CASCs)
  • Insolvency
  • Properties with a rateable value less than £15,000 (*)

Introduction of anti avoidance provisions which prevents owners from constructively vandalising their own properties. Provision has been made that unoccupied property whose physical condition has been changed could be valued in its previous state.

(*) The minimum RV threshold has been changed for a 1 year period for financial year 2009-10 from £2,200 to £15,000, with vacant properties beneath this rateable value qualifying for 100% relief.

A more detailed synopsis is shown on the attached Empty Property Relief – England & Wales document.

Scotland
The business entitled to possession is liable for 50% of the occupied liability after expiry of a 3 month period where 100% relief is applicable. The relief applies to the property not the ratepayer. That is, the vacant relief is for a 3 month period commencing on the date it first became unoccupied, NOT 3 months from the date that the relevant ratepayer becomes liable.

There are Limited exemptions which qualify for indefinite 100% relief whilst vacant.

  • Listed building
  • Industrial properties
  • Insolvency, bankruptcy or administration
  • Legal prohibition for occupying the property e.g. no valid fire certificate - essential for work place & properties frequented by the public
  • Properties with a RV less than £1,700

Notes:
i) last use determines position
ii) ratepayer to prove position concerning exemption
iii) condition of property not a consideration
iv) deliberate action to make unusable not valid
v) deliberate action to make unusable not valid
vi) rateable value within the valuation roll adopted
vii) essential to ensure the rateable value reflects the on site conditions
- e.g. under reconstruction, redevelopment, refurbishment etc may have an impact on the current value shown in the valuation roll

A more detailed synopsis is shown on the attached Empty Property Relief – Scotland document

Non Discretionary Relief

There is relief available from a range of measures from the full impact of business rates. The reliefs available comprise charitable rate relief, disabled persons rate rebate, farm diversification rate relief, rural rate relief, and derating allowance for stud farms.

Code of Practice

The main professional bodies comprising the Royal Institution of Chartered Surveyors, Institute of Revenues Rating and Valuation, and the Rating Surveyors Association have introduced a mandatory Code of Practice for their members to follow when acting as rating consultants. Standards are laid down for professional rating advisors when seeking instructions to act or agreeing terms of engagement with ratepayers. The Code came into force on 1 April 2004 and applies to all new and renewed contracts from that date. Professional advisers are also required to provide a summary of the key rating information to clients.

Download the Code of Practice document

Business Improvement Districts (BID)

BID schemes provide local authorities and local businesses with the opportunity of working together to put into place projects to improve their local area. The BID will comprise a contract between local authorities and local businesses for additional services and improvements, which would be above the base level of service provided by the local authorities.

This would be funded by a levy raised through an additional rate. The BID scheme would be for the affected businesses to agree. They would vote in a referendum upon the agreed proposal.

The National BIDS Advisory Service has been set up and provides information relating to the various schemes. Information is available from their website at www.ukbids.org. Business Improvement District Scotland has been established to oversee and implement any BID's proposals and information specific to Scotland can be found on their website at www.bids-scotland.co.uk.

Rating Web Links

Scottish Government www.scotland.gov.uk
Communities & Local Government www.communities.gov.uk/corporate
Office of the Deputy Prime Minister www.odpm.gov.uk
National Assembly for Wales www.wales.gov.uk
Scottish Assessors’ Association www.saa.gov.uk
Scottish Valuation Authorities www.saa.gov.uk/saacontacts.html
Valuation Office Agency www.voa.gov.uk
Scottish Business Rates Information www.scotland.gov.uk/businessrates
English Business Rates Information www.mybusinessrates.gov.uk
National BIDS Advisory Service www.ukbids.org
Business Improvement Districts Scotland www.bids-scotland.co.uk