‘Be vigilant’ businesses warned as new commercial property rateable values announced
NEW commercial property valuations released last week by the Government’s Valuation Office Agency (VOA) have confirmed both rises and falls in the rateable values of commercial properties across the UK, with Yorkshire businesses broadly seeing a drop.
However, some businesses in Ilkley claim the town has been “dealt a blow” as one of only a few places in the region to see the majority of values increasing.
The figures are the VOA’s official estimate of April 2015 rental values, based on information provided by occupiers or by site visits. Local authorities take the rateable value of each property and use a formula, set by the Government, to calculate new business rates bills which will come into force from April 2017.
“While rents in many Yorkshire towns have decreased since the last time rateable values were calculated seven years ago, there’s an urgent need for businesses to scrutinise the VOA’s new assessment of their property’s rateable value,” said Craig Newton, who heads the rating team at property consultant Eddisons
“If there appears to be any anomalies, such as the stated floorspace of the property being too large, then it’s important to act quickly to rectify matters with the VOA.”
The Government has introduced a new three-step ‘check, challenge, appeal’ process via which businesses can contest the rateable values they have been allocated.
“That may sound like an efficient and sensible enough approach,” said Mr Newton, “but the fly in the ointment is the chronic underfunding and understaffing of the VOA , which already has an estimated backlog of between 200,000 and 300,000 appeals to deal with, submitted by businesses against the 2010 Rating List.”
He added: “With such an enormous volume of outstanding cases it’s clear that appeals against 2017 rateable values are highly unlikely to receive priority treatment. With this in mind, the best advice – if you think the rateable value you have been issued for your property is too high – is to engage in dialogue with the VOA as rapidly as possible.”
Meanwhile, according to Dacres Commercial, Ilkley’s retailers and business owners will see their business rates increase next year, after the town fared much worse than many other Yorkshire towns and cities in the rates review.
It says that Ilkley is one of only a few places in the region to see the majority of values increasing, with rates falling on the whole in Skipton and Otley and staying broadly the same in Harrogate. The company is now advising Ilkley’s business owners to prepare to appeal the increases.
Mark Williams is a business rates expert at Dacres Commercial and says that Ilkley’s prime retail streets such as The Grove and Brook Street, have been hit particularly hard.
He said: “These new rateable values appear excessive and our estimates suggest the majority of retail properties in Ilkley will see their costs increasing next year. A typical store on The Grove or Brook Street could see its Rateable Value go up by over 25%, and in some cases over 60%.
“The new figures are based on rental values and assume that these have been continually rising in Ilkley, compared to Harrogate, where they are perceived to be staying the same and falling in many other towns and cities. The level of proposed increases are grossly unjust when compared with other popular retail destinations in the area. This will be hugely disappointing for Ilkley businesses who could be forced to pass these increased costs on to their customers.”
