Business Rates Revaluation
You may be aware that the Valuation Office Agency, an arm of government recently completed a revaluation of business rateable values across England & Wales, based on estimated rental values of business premises in 2015.
These will be effective in your next business rates demand in April 2017.
Happy New Year? Well it is a happier New Year for Merton Businesses than for many across London who have seen their rateable value soar considerably far more than here.
Here are 10 things you may not know about business rates:
- Business rates are a Government tax
- Local Authorities are tasked with collecting the rates in their area on behalf of the Government and receive funding back to support local services according to the population
- Business rates account for 3.9% of all Government tax receipts
- The rates revaluation exercise is intended to review the rateable values last set in 2008 and recognise local economic changes in many areas since the last revaluation to redistribute where that 3.9% is collected
- Following revaluation, the government will still receive its 3.9% by setting an appropriate multiplier (called the UBR) but the burden following the review will fall generally more in the south than the north of England as property values generally increased in the south and in the north stayed relatively flat or even reduced.
- Of the 32 London Boroughs, the average increase in rateable value is 22.8%. (26.2% retail and 21.2% office)
- UK overall the average rise is 9%. The highest in London, Hackney is 46% and John Lewis Oxford Street face a rise of £5m next year! Hardest hit are businesses high growth sectors-leisure/coffee shops, and tech clusters that have transformed some areas. Open plan co-working space have risen by 80-100%
- The immediate impact will be softened with additional relief phased over the coming 5 years
- The relative good news is that in Merton the average rise is approx. 7% and the third lowest in London and just below the National Average
- There is a 7 year backlog in the business rates appeals system nationally, some 290,000. We understand no appeals following the recent review will be accepted until April
The future of the current business rates system is under review, with political calls for devolution to local authorities but the Government’s historic 3.9% will be collected anyway by some means according to the commentators!
You can check your new rateable value here: https://www.tax.service.gov.uk/view-my-valuation/search or https://www.gov.uk/correct-your-business-rates