Business Rates 2017 Briefing
By: Louise Abbots
inStreatham Business Improvement District
Hundreds of local businesses are set to see dramatic changes to the amount they pay in business rates from April after the government published the new ‘rateable values’ of their properties in September 2016.
All businesses in the UK pay a tax on their premises based on the value of the property they occupy. Every five years the underlying value of properties is assessed to determine its "rateable value", which broadly represents the yearly rent for which the property could be let.
Rates were last revalued in 2010 (the 2015 revaluation was cancelled due to economic uncertainty) but the underlying property values used are always from two years previously, so the rates set 2010 were based on property values in 2008 before the recession.
So, are the changes fair?
On 30 September 2016, the Valuation Office Agency (VOA) published the new rateable values of every non-domestic property in England. Streatham businesses can check their new values using the VOA website: www.gov.uk/correct-your-business-rates
Initial discussions with local businesses indicate that at worst, revaluation could mean closures, redundancies and other negative impacts will affect Streatham. The InStreatham Business Improvement District is keen to hear from businesses who may be affected by a rise in their rateable values, and is working alongside other business groups in London to campaign on its member’s behalf for a fairer deal.
Rates represent the third biggest outgoing for many small businesses after rent and staffing costs, but what do the costs cover? Payment is collected by the local authority then sent to central Government to be distributed back to Boroughs to cover ‘statutory services’ but it can be difficult to see any tangible returns. With residential Council Tax, waste collection services are included, and many businesses owners feel they should receive services such as commercial waste removal, licenses for outdoor tables and chairs and special treatment licenses in return for the high rates they pay.
To help businesses adapt, a transitional relief scheme will be applied, capped at a 5% increase for small businesses, 12.5% increase for medium businesses and a 42% increase for large businesses. Conversely. for those benefiting from the revaluation a stepped scheme will be in place reducing their rates payments over the next five years so the benefits won’t be felt immediately either way.
Whilst there is still a lot of uncertainty around the Government’s policy commitment to give local authorities the power to retain business rates by 2019 in London - not least in terms of how this plays out with GLA’s financial “take” through this arrangement – now is the time for BIDs to start working through the financial, operational and political issues and opportunities.
The amount of business rates raised in Lambeth’s BID areas is very significant, and this is set to grow because of the 2017 Revaluation, and as Lambeth develops - hence there is a focus on “Inclusive Growth” in the Future Lambeth Plan.
How can you find out more?
A business rates briefing event will take place early next month led by Streatham BID with representatives from Lambeth Council, the Valuations Office and independent Business Rates advisors focusing on: how Business Rates are calculated and what they cover, how to appeal your increase if you think it’s incorrect, what transitional and small business reliefs are available and what will happen in 2020.
Please see www.instreatham.com or @instreatham for more information.
Images by Suzanne Hakuba