20 Feb 23 by Jordan Kennedy
With the 2023 Rating List arriving on April 1st 2023, here’s our lowdown on what it means for you.
2023 Rating List
Business rates are a tax on the occupiers of land and the buildings they occupy. This tax is calculated by the Valuation Office Agency (VOA), who estimate the open market rental value of a property on what is known as an antecedent valuation date (AVD). This date is exactly two years before the date of a revaluation. This estimate of the open market rental value of the property becomes known as the property’s rateable value, which is then multiplied by a rate which is determined by the government to produce the annual business rates liability.
Rateable values are updated periodically to reflect the market and economic change. We are currently approaching the end of the 2017 rating list, with values based on an antecedent valuation date of 1st April 2015.
The draft 2023 rating list has now been published, showing that the 2023 business rates revaluation looks set to reduce retail and office rateable values in the South West by 5%, which will of course be welcomed by owners and occupiers of these property types. Conversely, industrial occupiers face – on average – a 27% increase in their rateable values, whilst caravan parks and car showrooms face average increases of 32% and 23%, respectively.
You can see your current and future rateable value at https://www.gov.uk/find-business-rates.
Whether your rateable value is set to increase or decrease, it is important to ensure your business rates liability is based upon correct and fair information. Action can be taken now to ensure you are paying only what you should, now and in the future.
The VOA assess the rental value of retail, office and industrial properties by applying a rate per square metre to the floor area. It is therefore important to ensure the floor area informing your rateable value is correct as, if the VOA are basing their assessment upon too high a floor area, your rateable value could be too high. It is also possible to inform the VOA you think the actual valuation (price per square metre) of your property is wrong. This needs to be proven with reference to comparable evidence at the AVD.
The rateable values of trading entities such as holiday parks, pubs and hotels, are calculated by reference to the fair maintainable turnover (FMT) of the actual business. For these property types, it is therefore important to ensure the FMT the VOA are basing their assessment on fairly reflects the actual turnover of your business.
Vickery Holman can tell you if they think it will be possible to have your rateable value reduced and can work with the VOA on your behalf by following the Check, Challenge, Appeal (CCA) process.
As the draft 2023 rating list has now been published, factual errors in your property valuation (such as the floor area) can be corrected prior to the list going live on 1 April 2023. This could lead to a reduction in your current and future rateable value. Appeals to the actual rate per square metre applied in the valuation of the property cannot be submitted until after 1 April 2023, however.
Meanwhile, any errors discovered in relation to rateable values in the current 2017 rating list can also still be appealed using the CCA process, as long as the process is started before 31 March 2023. Any savings can be backdated as far as 1 April 2017, depending on individual circumstances. This is therefore the time to act to ensure no opportunities are missed.
Please talk to our Rating team by contacting Jordan Kennedy.