Thursday, 16 February 2017

The Hidden Cost of Business Rates for Licensed Premises

Business Rates
If you have a business with a premises licence to sell alcohol, you may by now be aware of the upcoming increases to your Rateable Value and the impact that this will have on your profitability.

Licence Fees
In addition to this there is a further increase to costs that you may be facing, relating to your annual licence fee. Rateable Value is used to set annual licence fees so these may be going up and there are moves afoot to change the way Business Rates are currently appealed.

Appeals Process
The government has embarked on a comprehensive review of Business Rates with the aim of producing a more streamlined and efficient system, designed to reduce the vast number of entirely speculative appeals raised each year.

The most significant change is the proposed introduction of a multi-stage challenge process, placing far greater onus on the ratepayer or their agent to provide more detailed information right from the outset.

1.      Check – This initial stage provides an opportunity to establish and review the facts upon which a valuation is based. If the Valuation Office accepts these factual arguments, then they will amend the Rateable Value. If the facts are still in dispute, then there is an opportunity to move to the next stage.

2.      Challenge – This stage requires further supporting information, comprehensive rental evidence and a calculation of the revised Rateable Value. If an agreement cannot be reached, then further action is required to escalate the case to the next stage.

3.      Appeal – For the first time there may be a fee to escalate the challenge so that it can be heard by the Valuation Tribunal and a very limited ability to add additional evidence to that used at the challenge stage.

The Valuation Office believes this process will be more transparent and easier for businesses to navigate, thereby reducing the number of appeals.

Initial indications are that much of the process will require the submission of information online at numerous points and within rigid timeframes.

Failure to comply would result in the challenge being unsuccessful.

Rather than improving transparency and understanding of the system this is likely to create a substantial administrative burden for ratepayers, especially those with multiple properties.

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High business rates have contributed to one in five pub closures in England and Wales over the past six years, an exclusive BBC Radio 4 investigation has claimed. 

Click here to read the article By Daniel Woolfson, 16-Feb-2017