How to Appeal Against a Commercial Property Business Rates Valuation in the UK?

March 26, 2024

In the complex world of commercial property ownership, one aspect that often causes confusion and frustration is the issue of business rates. Often seen as an unavoidable cost, business rates are a form of tax levied on non-residential properties in the UK. These rates are based on the rateable value of your property – a figure determined by the Valuation Office Agency (VOA). If you believe this valuation to be inaccurate or unfair, it is possible to challenge it. In this guide, we’ll walk you through the key steps and considerations in appealing against a commercial property business rates valuation in the UK.

Understanding Business Rates and VOA Valuations

Before embarking on an appeal, it’s vital to understand what business rates are and how they’re calculated. Business rates are a tax on properties used for business purposes. They are charged based on the property’s ‘rateable value’, a measure of its estimated rental value on a particular date. This valuation is carried out by the VOA and generally revalued every five years in a process known as revaluation.

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Business rates can be a significant expense for commercial property owners. They are used to fund local services and are collected by local authorities. If you’re unhappy with your rateable value, it is your right to challenge it. However, successfully navigating the appeal process requires a firm understanding of how the VOA determines this figure.

Preparing to Challenge Your Business Rates Valuation

You’ve got your rateable value and you believe it’s incorrect – now what? The first thing to do is to gather evidence to support your appeal. This could be comparing your valuation with similar properties in your area, or proving that the VOA has made a mistake, such as overestimating the rental value of your property or not taking into account its size or condition.

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It’s also important to note that the VOA has the power to increase your rateable value if they believe it’s too low. So before you lodge your appeal, ensure your case is solid. Contacting a professional agency that specializes in business rates appeals can be a wise move here. They can provide expert advice and guide you through the process.

Navigating the Check, Challenge, Appeal Process

When challenging your business rates valuation, you’ll need to follow the VOA’s official ‘Check, Challenge, Appeal’ process. Introduced in April 2017, this three-step process can seem daunting, but with the right information and assistance, it’s entirely manageable.

The ‘Check’ stage involves confirming that the details the VOA holds about your property are correct. If they’re not, you’ll need to provide accurate information.

Next is the ‘Challenge’ phase. Here, you’ll present your case to the VOA, detailing why you believe your rateable value is incorrect and providing supporting evidence. The VOA will then review your challenge, a process that typically takes around 18 months.

If the VOA rejects your challenge or you’re not satisfied with their decision, you can then ‘Appeal’ to the Independent Valuation Tribunal for England and Wales. This final step can be complex and time-consuming, so be prepared for this eventuality.

The Role of Professional Advisors

A commercial property business rates appeal is a complex process that can be time-consuming and stressful. That’s where professional advisors can help. These experienced professionals can take on the burden of the appeal process, allowing you to focus on running your business.

These advisors can provide valuable services like assessing your property, gathering evidence for your appeal, and dealing with the VOA on your behalf. Their expertise can be invaluable in making a successful appeal. So while their services will come at a cost, it’s often a worthwhile investment for commercial property owners.

Possible Impacts and Results

It’s crucial to understand that appealing your business rates valuation doesn’t guarantee a reduction. In fact, if the VOA finds that your property has been undervalued, they may increase your rates. The process can also be lengthy, so immediate relief from high business rates is unlikely.

However, if your appeal is successful, the changes will be backdated to the date you made your ‘Check’. This means you could be eligible for a refund of any overpaid rates. Whether you’re a small office or a large commercial operation, a successful appeal can have a significant impact on your bottom line.

As you can see, appealing against a commercial property business rates valuation in the UK is not a decision to be taken lightly. It requires careful consideration, thorough preparation and, often, professional guidance. But for those who believe their rateable value is unfairly high, it’s a crucial step in ensuring their business is not overburdened by excessive taxation.

The Importance of Understanding Your Rates Liability

Before you initiate an appeal against your business rates valuation, it’s crucial to fully comprehend your rates liability. The rates liability is the financial obligation that you, as a commercial property owner, are expected to meet. This liability is calculated by multiplying your property’s rateable value by a figure known as the ‘multiplier’ or ‘poundage rate’, which is set by the government.

Your rates liability is not solely determined by the VOA’s valuation of your property. Other factors such as transitional relief, small business rate relief, and rural rate relief can also influence your liability. Understanding these factors can give you a better grasp of how your rates bill has been calculated and whether there’s potential for reduction.

If you strongly believe that your rates liability is excessive due to an inaccurate rateable value, start gathering evidence to support your claim. This could be discrepancies in your property details held by the VOA, significant changes in your local area that may affect property values, or inconsistencies in valuations of similar properties. It’s important to remember that the goal is not simply to reduce your rates bill, but to ensure that your rateable value reflects the true rental value of your property.

Utilising the Valuation Account for a Successful Appeal

For a successful appeal, it’s vital to utilise the valuation account provided by the VOA. This is an online service where you can view your property details, rateable value, and other information used by the VOA to calculate your business rates. It also allows you to initiate the ‘Check, Challenge, Appeal’ process.

Make sure to thoroughly check the information in your valuation account. Verify property details including the size and layout of your commercial property, its location, and comparable rentals. Any errors or discrepancies can be grounds for an appeal.

Remember to provide a robust argument and strong evidence when challenging your rateable value. This might include rent receipts, lease agreements, planning permission documents, photographs of your property, or other relevant documents.

Finally, maintain patience and tenacity. The VOA has up to 18 months to respond to your challenge. If your challenge is unsuccessful, you still have the right to appeal to the Independent Valuation Tribunal.

Conclusion

Navigating the complexities of a business rates appeal can be a daunting task for any commercial property owner. The process requires a deep understanding of business rates, thorough preparation, and unwavering patience. Despite these challenges, it’s important to remember that it’s your right to challenge an unfair rates valuation and ensure that your business is not disproportionately burdened with high rates.

Professional advisors can be an invaluable resource in this endeavour. Their expertise in dealing with the VOA and understanding of the business rates system can increase your chances of a successful appeal.

In the end, the effort involved in appealing a business rates valuation can pay off significantly. A successful appeal can reduce your rates liability and potentially even lead to a refund of overpaid rates. Balancing the potential benefits with the time and effort required is key to deciding whether to pursue a business rates appeal. Despite the complexities involved, with careful planning and determination, a fairer, more accurate rateable value is an achievable goal for all commercial property owners in the UK.