business rates valuation

[doctor Bob]

Hi,
My business rates valuation is currently £15500. So I miss out on any relief or small business grant.
I'm classed as warehouse and premises.
The premises is made up of 2 units joined together by a large internal door (lets say unit 1 and unit 2). Unit 1 is twice the size of unit 2. unit 1 is a cabinet making workshop, unit 2 is one third sprayshop, one third storage and one third small showroom again classed as "warehouse and premises"

Is there anything I can do to reduce the rates, i.e is storage a lower cost. or can I claim some sort of retail to get a grant.

I ask not really for greed, but I was approached by the Altus group today who reckon they could reduce the rates and get me a retail grant. They want 25% of anything they get and future stuff. Figured I may as well give it a go myself.

I am a little miffed about getting bugger all from the gov't because I have a bit of space, I'm deffo a small business. Also a director so no handouts, if I can get a bit why not try?

Any help would be great. I'm waiting for my online acknowledgement of my occupation at present before I can move forward.

However, I know it can go up, so don't want to do it if there is no hope.

 

[Garno]

Your accountant should be able to help you out with the info you need.

You have done the right thing saying no to the Altus group, did they by any chance offer you any g/tees that they could reduce your rates or were they very vague and not even offer up potential savings?

 

[doctor Bob]

Your accountant should be able to help you out with the info you need.

You have done the right thing saying no to the Altus group, did they by any chance offer you any g/tees that they could reduce your rates or were they very vague and not even offer up potential savings?

No they were quite specific, over the years I've had loads of these companies approach me, Altus are the first ones with no up front fees.
I'd prefer to do it myself however if you look at their history they seem reputable and will have a data base to work from, iunlike my accountant.

 

[Ali]

Who owns the property?

You'd have to split the properties and get a revaluation to decrease the rateable value. Splitting might mean actually emptying/repurposing for a VOA visit and possibly registering with land registry. Land registry might take 6 months or more to go through.

I'm currently buying a restaurant (price negotiated in Feb - Just my luck). Before the whole property was rated at £25k rent accruing £5k in business rates. The property was separated (there was a considerable upstairs accessable from a separate entrance) so the split was done properly recorded on land registry etc.

 

[Ali]

Land registry changes might also incur property taxes etc when you have to assign a fee. might be messy short term if it's something you have to do.

 

[Blackswanwood]

It feels wrong that we have a system whereby you have to pay or give away something just to get charged the right amount.

I am not sure that data is what will enable Altus to win an appeal but can see why it may have led them to the point of feeling your situation may bear fruit for them. Won't the case be won or lost based purely on the understanding of the complex rules applied to your situation?

 

[AJB Temple]

Why do you need to be one business? Let's say you sub contracted all of the spray business, finishing, marketing and customer handling to your wife's entirely separate (with its own adjacent premises) business. Structure being such that both are under the threshold.

My understanding is you lease the premises. You would need to look at lease assignment and termination clauses.

Retail aspect should be easy to establish as you could have a very small retail showroom aspect and retail brochure. You are selling to third parties - just make sure you meet the criteria for describing some of them as retail. From past posts some clients at least are end users - clearly retail.

 

[Phlebas]

If it is not a rude question, first, so I know where to start, how much do you understand about how the VOA arrives at its rating valuations?

Incidentally, a contrived split of the hereditament is unlikely to succeed if you continue to functionally occupy as one unit. Neither is an attempt to reclassify part as retail (for which, btw, the VOA is likely to expect to see a retail planning consent, which might, in, and of itself, result in an increase in RV even if you do then get some short term relief). Not impossible, depending on the circustances, but unlikely.

Oh, and usual disclaimer - I am not, nor am I puporting to offer specific professional advice to you, and if you want definitive advice you should engage your own advisor.

 

[doctor Bob]

The split is an avenue we explored many years ago.
I think it's a non starter.
Also for all I want my rates reduced, I'm very much straight down the line and don't want to be underhand. The business is one business and I want it to stay that way. I don't want added complications of seperate payrolls, accounts, invoicing company to company, pensions for 2 companies, HSE for 2 companies, etc etc.
I know very little about Valuations and therefore I'm wondering if it's worth handing over to a body "Altus" which charge no up front fees.

 

[Phlebas]

They want 25% of anything they get and future stuff. Figured I may as well give it a go myself.

I know very little about Valuations and therefore I'm wondering if it's worth handing over to a body "Altus" which charge no up front fees.

Bit of mixed message here, which do you want?

Briefly RV is the rental value of the property at the antecedent valuation date (1 April 2015 for England if my memory serves). Go on the VOA website and look up the valuation of your property. It should be there. It will be broken down into areas, with a rental rate for each area. Check this for accuracy. Bear in mind if you have made alterations (mezzanine, internal offices, whatever) that are not recorded, the VOA, once aware, may apply a higher rate to these areas. The 'tone of the list', that is to say the basic rental values used, should be well established by now, especially if you are on an industrial estate, so are unlikely to be susceptible to challenge, unless there has been a material change of circumstances.

If the RV is correct (or more accurately defendable by the VOA) then the only avenue for savings is by manipulating the various relief mechanisms.

It's a lot more complex than that, of course, but that unless you want a surveying qualification and read Ryde on Rating that's probably all you need to know.

I have no personal experience of Altus, after my time, but they do employ properly qualified surveyors, unlike the infestation of salesmen whio pop up after every revaluation. One thing to watch though is how they calculate the 25% of saving, and over what period, and whether that fee is payable as a single lump sum when the appeal is concluded - ie including anticipated savings. On the face of it I am surprised they would be bothering with a property with an RV of £15,500, because unless something is wildly wrong (like a categorisation error) the fees wouldn't justify the work.

 

[Richard_C]

I know nothing of rates or altus but years ago a small add on part of my job was facilities management for an office and lab block, c100 staff.

We were inundated with companies promising savings on phones, heating oil, photocopying...

In almost all cases they took a big cut, and wanted things like 7 year agreements. I never went with any of them, not keen on giving anyone years of continuing income based on what they might save in year 1.

If you are tempted by companies of that ilk, read the small print especially how to end the agreement.

 

[doctor Bob]

They want 25% of anything they get and future stuff. Figured I may as well give it a go myself.

I know very little about Valuations and therefore I'm wondering if it's worth handing over to a body "Altus" which charge no up front fees.

Bit of mixed message here, which do you want?

I would like to do it myself but if it's complicated and I'm unlikely to succeed then I want an agent to look at it who has more knowledge. However if the opinion is it's pointless then I can live with things as they are.

 

[powertools]

I've been through this process many years ago and all I would say to you is that you need to be aware that it is possible that you will get a reduction but it is also possible that you will get an increase.
I don't think that you need an agent to do it for you but you need to research how much other buildings in your area are charged and if they are a lot lower than you then you can use that info to back up your case.
All the info for the amount other people are paying in your area is freely had on the internet via your local council website.
Good luck.

 

[Terry - Somerset]

My simplistic understanding is that the business rate is calculated on the rental value of the building in 2015 multiplied by a factor.

Different parts of a property will have different relative values depending on their floor level and type of accommodation - eg: office, storage, staff toilets, showrooms, canteens, loading bay, glass house etc etc.

At a guess the main thrust of any claim would be to understand how the current floor area usage compares with that upon which the business rates valuation was based. This is probably the intelligence that you would be paying for - eg: how do you differentiate storage from production.

One large company I worked with were quite worried that the Valuation Office may take a look at their valuation. The reason - the building was originally rated on mainly office use - but were a revaluation completed it would expose the large area occupied by IT which carried a very much higher rental value. Risk, I recall, was in the low £m.

 

[RobinBHM]

Rate valuation surveyors are probably the biggest sector for fraudsters, the industry is awash with scam artists.

Altus I believe are actually genuine but they charge an awful lot.

There are many errors on the rates system and these companies often rely on finding errors to make a saving.
The only other way is to prove similar companies in the areas are paying less.

Its easy to check if your business is rated correctly just go to:

https://www.tax.service.gov.uk/business ... 1585845134

and measure your unit to see if the areas are correct and if they are in the correct categories.
Bear in mind if you have added any mezzanines or additional offices that will increase the rateable value -so dont try and get your rates to go up!

 

[Doug71]

We converted an old building we had in to a shop for my then wifes off licence/ deli business, made a lovely job of it.

I remember the chap coming round to value it for business rates and it was all comments like "Oh that balcony adds a lot of space", "Does the air con cover the full premises", "You have lots of CCTV cameras", "That's a nice big car park" :roll:

It seems so unfair that the more you spend on somewhere and improve it the more you have to pay.

 

[Geoff_S]

We converted an old building we had in to a shop for my then wifes off licence/ deli business, made a lovely job of it.

I remember the chap coming round to value it for business rates and it was all comments like "Oh that balcony adds a lot of space", "Does the air con cover the full premises", "You have lots of CCTV cameras", "That's a nice big car park" :roll:

It seems so unfair that the more you spend on somewhere and improve it the more you have to pay.

No it's not unfair!

It's f**king outrageous :?

It's like saying to someone who keeps fit and looks after themselves, "Hey, you're fitter than that other person, you can pay more tax & NI".

Back in the day, in semi retirement, I built a couple of kitchens for friends. Thinking that this might be a nice way to semi retire, I looked at what would be needed to set up some premises.

Bloody Hell :shock: I calculated that I would have to build at least 4 kitchens to cover the rates/rent/insurances before I even started.

Hats off to anyone who runs a business.

 

[Rorschach]

Business rates and similar taxes are just serve to stifle business and discourage growth and improvement. This is why we need a simplified tax code and more flat rate taxation both personal and business.

 

[Geoff_S]

Business rates and similar taxes are just serve to stifle business and discourage growth and improvement. This is why we need a simplified tax code and more flat rate taxation both personal and business.

How about a percentage local tax on actual profits made in a year instead of business rates. I'm sure that's already been suggested. That would at least give a startup a chance to make a go of it.

 

[Rorschach]

Business rates and similar taxes are just serve to stifle business and discourage growth and improvement. This is why we need a simplified tax code and more flat rate taxation both personal and business.

How about a percentage local tax on actual profits made in a year instead of business rates. I'm sure that's already been suggested. That would at least give a startup a chance to make a go of it.

I'd have it all centralised myself. Allowing local councils power in this way just encourages (more) corruption.