Appealing business rates

The rates that you will be paying from 1st April, 2023 are dependent on the Government's estimated annual rent of your property as at the fixed valuation date of April 2021.  The estimate is based on the assumption that the property is let on a full repairing and insuring basis which is aligned with the market. The estimated rent is called the ‘Rateable Value’ (RV) and can be found on the online rating list held on the Valuation Office Agency’s (VOA) website here.

Summary Valuation

Once you have found your assessment then open up the section on ‘How the rateable value was calculated’. In this section you will see a summary breakdown of your valuation with typically the floors along with any additional elements such as car parking. Provided these are correct, then you can proceed to review the areas (m2) / no of car spaces applied. In order to check the areas, you should familiarise yourself with the measuring methods used by the VOA which will change depending on the type of property. This information can be found on their website here.

Once familiarised, you should go to the section on your entry headed ‘Valuation details’ where they will state the measuring method they have used for your property and check if it is appropriate.

Scheme Reference

Within the summary valuation section, you will also see there is a specific ‘valuation scheme reference number’ for your property. This will set out the type of property the scheme applies to, and you should check that this is appropriate.

Submitting a Check

If the review of the above factual matters identify an error or omission then you are entitled to make an application to the VOA to correct this. However, please note that any Check can result in the rateable value increasing and professional advice should be sought if it any doubt. In order to submit the application, you would first need to be registered on the Government Gateway Portal for this assessment. Details on how to register can be found on their website here.

Once registered, you simply add your assessment to the account and that will enable you to prepare a Check.  The Check itself should provide sufficient detail to enable the VOA to simply understand the changes been requested. Details on their website can be found here

It should be noted that even if there are no factual inaccuracies a check still needs to be completed in order to challenge the actual valuation basis adopted by the VO.

Once the Check decision is issued then you can review the scope to challenge the valuation basis. The submission should be made within 4 months of the Check receipt. The only exception to this is where you have specifically included an external matter such as adjacent building works which you consider should warrant a reduction in your check. Under those circumstances you have 16 months from the date of the Check submission (Not from the Check decision).

If you did reference an external matter such as building works in the Check, then you should include the date the works started and the impact it is having on your business. Ideally, photographs and any details you can get from the contractor / Council planning department should be included. The Check should also state what level of allowance you are seeking.

Valuation Matters

Prior to submitting a challenge, it is important to note that rateable values can go up as well as down. In addition, there is only one right to lodge a challenge so professional advice should be obtained, if at all possible.

As stated earlier the Rateable Value is based broadly on the yearly rent that the property would achieve as at a fixed valuation date of April 2021. If there is an open market rent agreed on the property near to this date then that will be an important piece of evidence.

Ideally, you could also research the Land Registry for other leases on similar property in the locality where they were agreed close to the relevant statutory date. This would enable you to weight your rent against others to determine if there is any material difference.

Another matter that you need to be aware of, is the fact that rating assessment is looking to value the property in its fitted state. So if you have taken the property and fitted it out you will need to consider if this fit out would result in an addition on top of the rent. For example, in the City of London on the 2017 List it was agreed that the fit out of offices would result in an increase of £ 25m² to the valuation basis.

Aside from the rental evidence you should also look at the rating valuations applied to other comparable properties in the locality to see if they are lower than yours.

Further details on the requirements of the challenge can be found on the website here  

What if the Valuation Office Agency don’t agree with me?

The VOA are required to issue a decision within 18 months of the challenge submission. If you are unhappy then an appeal can be lodged with the Valuation Tribunal. This currently costs £ 300 and details of the requirements for the submission can be found on their website here.   

Quick Check List

Whether you are successful in appealing your business rates depends on a number of factors. These may include challenging:

•  An incorrect valuation - does it match the 2021’s rent?
•  The areas that you have been valued on - are these correct?
•  Property - has it been incorrectly split into more than one listing, or combined with others into a single listing?
•  A change to the property or area that should be shown in the rateable value.
•  The reference scheme number - does is match the age/location of your premises?
•  A ‘material change’ to your property

Material changes may include:

• New developments in the area
• New roads, closures or changes to access routes
• Change of use
• Competitors

Remember: You can only appeal against each of the grounds once.

_{How we can help}

• If you are yet to check or challenge your current rating assessment, contact our business rates experts.
• As one of the leading specialist teams in this sector, we offer a full rates management service which will ensure that this costly overhead is mitigated at every stage.
• Full rate account management including Treasury functionality.
• Highly specialist rating team to review and challenge your assessment where appropriate.
• Complete in-house empty rate mitigation service for void properties. 
• Comprehensive historic rate account audit service
• Full BTR/ Council Tax service.

Knight Frank's business rates experts are members of the Royal Institute of Chartered Surveyors (RICS) and the Institute of Revenues, Rating and Valuation (IRRV).