1 April 2010
NB Real Estate, part of Capita Symonds, warns that the
new business rates, taking take effect today, could see the biggest
fall in bills limited to just 4.6% for large properties -
despite rateable values having fallen by much more.
The 4.6% floor means that for many properties rates bills will
not reflect the recent slump in property values encountered by many
business owners. However, rates bills can go up by as much as
A commercial property with a rateable value that has fallen by 40%,
for example, will only see its bills decrease by a maximum of 4.6%
this year. This is due to the Government’s special transitional
arrangements, which will phase in significant increases or
decreases in business rates bills over the next five years .
John Powell, Ratings Expert and Director at NB Real Estate,
says: “Businesses have gone through exceptional hardship in the
last two years and many will find it terribly unfair that their
rating bills can only go down by 4.6% even if the value of their
property has fallen by much more than that.”
The current rating system is causing many other issues for
businesses, for example, the complexity of rating bills and the
difficulty in appealing against business rates.
Powell says: “Many business rates bills are so obscure that it
is almost impossible to understand even for an intelligent Finance
Director. It is also not rare to find inaccurate information or
miscalculations in the bills, which are extremely difficult to
The Valuation Office Agency, which is responsible for
determining the rateable values, also makes it difficult to appeal
against business rates. For example, failure to fill in the appeal
form properly will see the case rejected straightaway.
Comments John Powell: “This can have serious repercussions for
businesses as they cannot appeal more than once for the same
Powell also says that in addition, tenants can only appeal for a
rate reduction when a ‘physical’ change has occurred in the area
where the property is based. This could be the construction of a
big shopping mall near a property, building work in the next-door
property to local retailers or the split/merger of a property. The
deterioration of the economy, for example, cannot be used as a
ground for appeal.
The new legislation means that businesses outside London
may also be charged a supplement on top of their business rates. So
far, the only supplement charged has been to support the Crossrail
project in London.
For more information on Business Rates visit Business
1 Properties with rateable values above £25,500 in
Greater London or £18,000 elsewhere