Occupants of non-domestic properties, typically those occupying commercial or industrial premises, pay business rates to the local council’s business rates department. Such as in areas like Bolton, where council business rates on commercial properties can be overvalued. Many properties may have even missed out on reliefs in the current rating list period where Bolton council’s business rates department have not informed them that they are eligible.
“Based on our findings,” Anthony Hughes of RVA Surveyors said, “We estimate that as many as 50% of all commercial properties in England and Wales that pay their hard-earned money to the local council’s business rates department, could be overpaying.”
According to the International Property Tax Institute (IPTI), The Valuation Office Agency (VOA) is the largest central valuation agency in the world. The VOA sets the rateable value (RV) for each commercial property at each new revaluation, which in turn determines the amount of business rates liability for that rating list.
Commercial property owners and tenants in England and Wales pay the largest levy of commercial property tax in the world.
The VOA have calculated that the combined RV for businesses in England and Wales in the 2023 rating list will be over £70 billion. Last year brought a lot of economic turmoil – especially for businesses. Speculation on the expected business rates hike spiralled, and while the government have attempted to stem most of the bleed-through, how effective will it be?
What does this mean for my business?
There were 10,523 businesses active in 2021 in Bolton. Council business rates will be applicable to most of them, and it is the responsibility of the local authority – Bolton Council – to collect them. Overall, the VOA have calculated that there will be 2.14 million commercial properties across England and Wales that are liable for business rates tax in the upcoming rating list.
The government have stated that the overall RV for England and Wales will not rise by more than 7.1%. Originally, that was less than 1% in November 2022, but by December 2022 (less than a month later), that figure had changed. These numbers however do not account for differences in industry or local area – which do affect your council business rates. Bolton, for example, will see commercial properties RV rise by an average of 24.2%.
The current rating list (the 2017 rating list) is due to end on the 31st of March 2023, after which commercial property owners and tenants will no longer be able to contest their business rates liability for the current rating list. The government will not tell businesses if they are eligible for a reduction.
A reduction in your business rates could be an invaluable cash boost. The long-term benefits of receiving a reduction – or even potential backdated savings – could be vital.