Property-related costs are already the second biggest business expense after salaries, and, many businesses will see them rise even further in 2010 when the next round of rating revaluations come into force.
That is the view of Chris Allison, Managing Director of cost and purchase management specialists Auditel.
In 2010, as part of the Government’s five-yearly rating revaluation cycle, all non-domestic properties in the UK will be revalued against the 1st April 2008 market rental value.
This value will be based on the annual rent the property would have attracted on this date, assuming it were empty and available to let on a full repairing lease. As a result, businesses in many areas will see large increases in their Rateable Values, which could have significant financial implications.
In addition, the Government is currently proposing legislation that will permit councils to levy a supplementary business rate from 2010.
The Valuation Office Agency are already collecting data to help them ascertain the 1st April 2008 rental value by way of an innocuous looking form called ‘Request for Information’ and, as Chris Allison points out, it’s very important that this form is completed correctly and without delay.
Businesses only have 56 days to return their completed form, after which they will incur a fixed penalty of £100. If they fail to return the completed form within a further 21 days, it will cost them another £100 and £20 per day thereafter. The VOA will publish the new rateable values in October 2009, after which businesses will only have six months to appeal.
The potential financial implications of the review are much more severe than just incurring a fine. The new rateable values will remain effective for five years so if the review is wrong, the cost over this period could be significant.
This is why many businesses will be seeking help and advice from specialist organisations like Auditel to ensure that the information they submit to the initial survey is correct. When the new rateable values are published Auditel can also provide free and objective advice on whether the new rate liability is fair and whether it’s viable to lodge an appeal.
2010 may seem too far ahead to worry about when there are so many immediate pressures for UK businesses to deal with, but the VOA review is already underway and that innocent-looking form could already be sitting in their in-tray.
By taking expert advice now, businesses of every size throughout the UK could stand to save both time and significant sums of money.