Tribunal reduces bar’s rateable value

A POPULAR bar has had its rateable value reduced following a hearing involving commercial property adviser Lambert Smith Hampton.

LSH, acting on behalf of Arc Inspirations, based in Headingley, Leeds, successfully reduced the rateable Value of Napa Bar and Kitchen in Leeds by more than £70,000 following a recent Valuation Tribunal hearing.

The rateable value of non-domestic property is fixed in most cases by an independent valuation officer of the Valuation Office Agency.

Following an extension to Napa, the rateable value of the property was increased from £40,000 to £130,000, and increased again to £151,000 following the 2010 List Revaluation.

LSH’s valuation of the property was £59,500 rising to £65,000.

The difference in value was generated after the Valuation Office, a department of HMRC responsible for setting the levels of value of all business premises in England and Wales, had valued the property using estimated turnover figures as opposed to a valuation method based upon actual rental levels.

The Valuation Office refused to accept LSHs method of valuation, so the case was put before the Valuation Tribunal, an independent body which decides the value of business properties based upon the evidence put before them when the two parties cannot agree.

The panel agreed with LSH that the property should have been valued using the rental method, in line with other properties in the parade, and reduced the value accordingly to £59,500. 

The 2010 Revaluation figure has subsequently also been reduced by £86,000 to £65,000 rateable value following the decision.

Cian O’Carroll, senior surveyor at LSH who acted on the case, said: “This case highlights some of the problems of using a method of valuation that is based upon the amount of food and drink an occupier is estimated to sell.

“Whilst it may be acceptable to use this method in certain circumstances, it is certainly not the only method that can be used and alternatives should also be considered. Such a large increase in RV puts a severe strain on businesses cash flow, so it is important that values are checked properly and challenged where appropriate.”