In the most recent budget George Osborne announced the government’s plans to help the UK’s small businesses; from April 2017 businesses whose properties have a Rateable Value of up to £12,000 will not have to pay business rates at all, a rise from £6,000 previously. Property with a Rateable Value between £12,000 and £15,000 will receive tapered relief. Mr Osborne said the “typical corner shop in Barnstaple will pay no business rates at all”.
Despite this, a brand new survey, that comes from the Business Rent and Rates experts CVS, shows over a third (36%) of business owners are unfamiliar or unaware with the changes put in place by the government. What’s more, 3 in 10 small business owners, with between 1-49 employees, said the changes in business rates aren’t enough to help local businesses and our high street.
Mark Rigby, Chief Executive at CVS Business Rates and President of Wasps Rugby Club, has provides advice for business owners:
What do the changes mean for local businesses?
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“On the whole, the changes are very positive for local businesses. For many small firms, it will mean smaller overheads, less administration and an overall cost saving of as much as £5,900 in some cases. This is money that could be reinvested back into the business for better marketing, trialling a new product, or increasing staff hours, for example.
“One of the most positive aspects of the changes is the certainty it gives to local businesses. Previously, the Government renewed the reliefs available to small businesses each year. This meant there was always some concern about whether this would happen when the Chancellor stood up in Parliament to present his Budget. However, these reliefs have now been doubled in value and made permanent.”
When will the changes come into play, and what do I need to do beforehand?
“The changes are scheduled to be introduced from 1 April 2017. This is also when the next business rates revaluation takes effect – the process by which each commercial property has its rental value assessed by the Valuation Office Agency. This rental value is then used to calculate the business rates you pay each year on your bill.
“Unless you are unhappy with your current businesses rates, there’s not a great deal that small businesses need to do before April 2017. However, the Valuation Office will publish its draft new values for each property on 1 October 2016 for consultation with local billing authorities.”
What about regional differences, who gets the best deal?
“Broadly speaking, the business rates you pay reflect the rent levels in the local property market. When the next revaluation comes into force in April 2017, some businesses will move outside of the £12,000 threshold for rates relief, and some will fall within it. This largely depends on the specific nature of your property and where in the country it is located.
“Business rates are currently based on rent levels assessed in 2008. So where rental levels have fallen since this time – such as for retail property in northern England – business rates will also fall. Where rental levels have increased – such as in London and the South East in particular – business rates are likely to go up. This change could mean a property becomes eligible or ineligible for rates relief in 2017.”
How can I have my business properly revalued, and will it save me money?
“The Valuation Office Agency is responsible for valuing businesses and it will often request information from a business owner via a ‘form of return’. However, because there are so many properties to evaluate – some 1.8 million – it’s easy for the Valuation Office to make mistakes in this process. Every ratepayer has the right to challenge their business rates bill at any time between revaluations. There is only one opportunity to do this however.
“Your chances of achieving success through an appeal – and therefore saving money – are improved if you get advice from professional, accredited surveyors. At CVS, we estimate that one in every two appeals is successful and we have helped businesses save more than £260 million since 2010.”
I need further advice, who is best to speak to?
“Information and advice is available on the Valuation Office Agency website. But businesses interested in saving money on their business rates should speak to a firm of professional surveyors such as CVS. Businesses can contact us for a no-commitment discussion on 0800 043 9231.”
For more information on the changes to business rates go to www.cvsuk.com and support your high streets this Local Business Week.