Bruton Knowles: The time to appeal business rates is now

By Adam Rock, partner and head of rating at property consultancy Bruton Knowles in Birmingham.

IF you haven’t already submitted an appeal against your business rates, now is the time to do so. Occupiers of commercial premises have until 31 March 2015 to submit an appeal or potentially risk losing out on five years’ worth of savings.

The changes to rules governing alternations to business rates were announced by the chancellor George Osborne in the 2014 Autumn Statement. However, if you blinked you would have missed it as the changes specifically relating to business rates appeals were buried in the small print. I

t’s not surprising then that many businesses are unaware of the changes and the savings they could be entitled to.

So what are the changes and how do they affect occupiers?

In his statement, the chancellor announced that any appeals submitted after 1 April 2015 will not be eligible for refunds or savings backdated to 2010. As a result, if a ratepayer does not appeal before 31 March 2015 and their rateable value is reduced following the appeal, they will potentially lose all savings i.e. refunds from 1 April 2010 up to 31 March 2015.

For example, a property with a rateable value of £200,000, which is then reduced to £160,000, would result in a saving of circa £126,084 up to 31 March 2017 if the appeal is lodged on time.

If the appeal is submitted after the 31 March deadline the savings are reduced to £39,880, resulting in potential lost savings of £86,204.

The changes to the rating appeals deadline is further evidence of the Government’s unnecessary tinkering of the rating system and signals its intent to hit businesses in the pocket via business rates.

It follows the Government’s unpopular decision to postpone the date that the new business rates assessments for commercial properties in the UK will take place from 2015 to 2017.

This was a major kick in the teeth for businesses as their rates would continue to be calculated based on rental values in 2008 market trends, when values were much higher than they are today.

Despite protestations from a cross-section of businesses, advisors and business groups, the Government refused to reverse its decision, much to everyone’s dismay.

So, we are where we are, and whilst it’s not ideal, the 2017 revaluation will, at least, bring rates closer to current market values, which should hopefully result in reduced rates liabilities for ratepayers from 2017 onwards.

In the meantime, the focus for occupiers should be on the business rates appeal deadline. Failure to act in time could result in thousands of pounds of lost savings.

To find out if you are entitled to a reduction in your business rates, contact me at adam.rock@brutonknowles.co.uk or call 0121 200 1100.