24 Feb What is Rateable Value?
As a new property or business owner, you may well find yourself asking what is rateable value?
This little known term suddenly becomes very important as it has a big impact on your monthly business costs. This is because this value determines the cost of business rates which must be paid.
The rateable value is calculated by the Valuation Office Agency and is based on a property’s probable annual market rent. (the amount that could be gained by renting the property)
The Valuation Office Agency review these values every 5 years and take into account changes to the size and use of the building.
Things such as an extension to a building or a change from a domestic dwelling to a business venue will have an impact on the rateable value. Similarly, properties that are multi-use may be valued at different levels.
Is Rateable Value The Same As Rent?
The rateable value figures are based on the open market rental values on 1 April 2015. Any new buildings (or any changes to existing premises) are valued at the rent which they would have commanded in April 2015. The rateable value is the same, whether the building is owner-occupied, leased or licensed.
How is Rateable Value Used?
It is used to calculate the value of business rates which must be paid to the local council on an annual or monthly basis.
Business rates are calculated by multiplying the rateable value of business premises by a multiplier (also known as poundage).
What Is Poundage?
Poundage is a figure set by the government which is also known as the Uniform Business Rate (UBR). This figure is set every year and is typically around 50p in the £. The UBR is adjusted every year to take inflation into consideration and is adjusted by applying the Retail Price Index (RPI).
How Do I Calculate My Business Rates?
If you would like to know the approximate business rates of a building, there is a very quick way of doing so.
Because poundage is usually set at 50p in the £, the charge for business rates will be approximately 50% of the annual rent.
Rateable Value Is Not Set In Stone
As the rateable value of a property is based on its rental value in 2015, there are many cases where this figure is incorrect.
Changes to the size or use of the building can have a huge impact on its rateable value. Additionally changes to the area such as a new road or building can also change the rateable value.
As these values are used to calculate business rates it is advised that business owners ensure that the rateable value of their premises is correct.
There are many different factors which affect how much you should be paying in business rates.
There are a number of different circumstances which mean that your business is entitled to rate relief.
Your local council will not automatically tell you if you are eligible for rate relief, therefore it is important that you check your eligibility.
How To Find Help
The rates system is complicated and questioning and appealing your rates can be very time-consuming. Rate reduction specialists can appeal your business rates for you. They will have the experience and expertise to help you reduce your payments and even get a rebate.
If you would like to find out if you are being overcharged for your business rates then get in touch with one of our friendly team.
You can call us on 0333 772 1604 or email firstname.lastname@example.org
Our vast experience helps businesses all over the UK to secure reductions and lower their bills.