Ask the Experts: How can I save money on my business rates?
Problem: “I run a hotel business and have received notification on my new business rate charges. They have gone up significantly. What can I do to reduce them? I have heard that there are ways you can appeal and have your bill reduced?" Anonymous.
Solution: The Government’s system for charging business rates is based on complex calculations relating to property rental value, the uses which are made of that property, and circumstances around the property that are seen to have impacts on it how it trades.
The values for charging business rates are set every five years by the Valuation Office Agency (VOA), which manages the periodic Rating Lists upon which collecting business rates on behalf of the Government are based. The last re-valuation took place in April 2010 so we are into a new value regime for charging. This is why you and the majority of other similar occupiers will have seen an increase in the rates bill this year.
There are ways you can appeal against the charges being proposed. By submitting a formal appeal, it is often possible to agree a reduction with the VOA. The most important thing is to provide evidence arguing against the new Rateable Value and explaining why it is not appropriate or justified.
These are some of the things that could help you secure a successful appeal and a reduction in your rates bill:
1) The rateable value at 1st April 2010 may be too high. An appeal to reduce it will solve the problem.
2) Use of your premises – do you still use your building in the same way as you did two years ago? If you have re-configured your space or changed the way you use it during the period of the VOA’s revaluation, you may be being charged more than you should. Even relatively minor changes to layouts and how you use your building can make a difference in the rates bill.
3) Have there been major roadworks or other physical events outside your control which have reduced access to your premises? They could be grounds for an appeal if these have impacted upon the trade at your premises.
4) Has any new development in your area changed the balance of competition in the area (eg new shopping centre, leisure centre or hotel complex)? Again, any new development could have a knock on effect on what you should be paying.
5) Has there been any increase in vacant commercial buildings in the locality? This could have affected the trade to the hotel.
6) If your hotel has been subject to flooding, fire damage or other similar calamity, there may be grounds for a reduction in the rateable value.
7) If your hotel is a seaside or leisure-based property, there may be physical alterations to the leisure activities, which have had either a temporary or permanent effect on the hotel’s trading capacity.
If any or all of these apply to your hotel – or for that matter to any business premises in the hospitality sector such as pubs, restaurants, bars, theme parks etc – you should consider appealing and would be well advised to seek specialist representation.
You could save a significant amount on your bills with many rates appeals resulting in reductions of 10 per cent or more – so well worth looking into.
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