Question: I know there is a “business rates revaluation” coming up in 2017; what is this and is there any way to get advice at this stage of the impact for my business?
Brian Rogan: The last revaluation of commercial properties for business rates purposes occurred on 1 April 2010. A new revaluation of commercial properties is due on 1 April 2017. The revaluation will form the basis of businesses’ annual rates bills for the next five years.
Business rates are an annual tax levied on business properties on the basis of the rental value of the property as at a statutory valuation date. Rates are also generally the third-highest outgoing for a business after rent and staff costs.
The revaluation is to be carried out by the Scottish Assessors, who are independent of the government. Factors that affect the rental value of business premises have changed dramatically in the years since the last revaluation in 2010, thus making the Assessors’ task a very difficult one.
Some non-tangible elements have affected rental values of commercial property; the impact of online retailing has depressed rental values of some high street retail premises, the financial crisis had an impact on office rental values in certain locations and changes to drink-driving laws and alcohol pricing have impacted on rental values of licenced premises. For some businesses, it may be difficult to quantify the effect of these non-tangible factors on the rental value of their property.
Employing an experienced business rates surveyor to give early guidance on the likely change in value would be prudent. This will allow a business to budget for changes in their cost base.
If a business believes the revaluation figure is overstated there is a right to challenge, however there is a strict legislative timetable for appealing. Without expert advice any right to challenge the new revaluation figure could be missed. Our recommendation is to get expert advice and get it quickly.
• Brian Rogan is head of rating at CBRE Scotland