Business Rates and Property Valuation

Business Rates, also known as non-domestic rates, are a tax on properties that are used for commercial purposes. They are collected by local authorities and contribute towards the funding of local services. The amount of Business Rates that a property owner has to pay is based on the property's "rateable value," which is determined by the Valuation Office Agency (VOA) in England and Wales, and by the Scottish Assessors in Scotland.

Rateable Value:

The rateable value of a property is an assessment of its annual open market rental value, as of a specific valuation date. For example, in England, the valuation date is currently set at 1 April 2015. The VOA uses various factors to determine the rateable value, including the property's size, location, and the type of business that operates from it. Once the rateable value has been determined, it is used to calculate the amount of Business Rates that the property owner has to pay. It is important to note that the rateable value is not the same as the property's market value.

Valuation Office Agency (VOA):

The VOA is an agency of Her Majesty's Revenue and Customs (HMRC) in England and Wales. It is responsible for providing the government with accurate and up-to-date information about the value of properties for use in the calculation of Business Rates. The VOA determines the rateable value of properties by carrying out regular valuations of all non-domestic properties in England and Wales.

Scottish Assessors:

The Scottish Assessors are responsible for determining the rateable value of properties in Scotland for use in the calculation of Business Rates. They are independent of local authorities and are appointed by the Scottish Government.

Check, Challenge, Appeal:

The Check, Challenge, Appeal (CCA) process is the system in place for property owners in England and Wales to challenge the rateable value of their property if they believe it is incorrect. The process is divided into three stages: Check, Challenge, and Appeal.

During the Check stage, property owners can view the details of their property's valuation and raise any queries or concerns with the VOA. If the property owner is not satisfied with the response, they can move on to the Challenge stage.

During the Challenge stage, property owners can provide evidence to support their case for why they believe the rateable value of their property is incorrect. The VOA will then review the evidence and make a decision. If the property owner is still not satisfied, they can move on to the Appeal stage.

During the Appeal stage, property owners can appeal the decision made by the VOA to the Valuation Tribunal, an independent body that hears appeals against decisions made by the VOA.

Material Day:

The Material Day is the date on which the Valuation Officer must have all the information they need to determine the rateable value of a property. This date is usually two years before the start of the rating list, which is the list of all rateable values in force at a particular time. For example, for the 2017 rating list, the Material Day was 1 April 2015.

Rating List:

The rating list is a list of all the rateable values in force at a particular time. It is used to calculate the amount of Business Rates that property owners have to pay. The rating list is maintained by the VOA and is updated every five years.

Small Business Rate Relief:

Small Business Rate Relief is a scheme designed to help small businesses by reducing the amount of Business Rates they have to pay. The scheme provides relief to businesses that occupy one property with a rateable value of less than £15,000, or to businesses that occupy more than one property, as long as the rateable value of each property is less than £2,900 and the total rateable value of all the properties is less than £20,000 (or £28,000 in London).

Empty Property Rate Relief:

Empty Property Rate Relief is a scheme designed to help property owners who have an empty property. The scheme provides relief to property owners who have an empty property for a certain period of time. The amount of relief varies depending on the type of property and the length of time it has been empty.

Transitional Relief:

Transitional Relief is a scheme designed to help businesses who would otherwise face large increases in their Business Rates as a result of changes to the rateable value of their property. The scheme limits the amount by which a business's rates can increase or decrease in a single year.

Backdating:

Backdating is the process of applying for a reduction in Business Rates for a previous period. Property owners can apply for backdated relief if they believe they have been overcharged for their Business Rates. The amount of relief that can be backdated varies depending on the reason for the overcharge and the length of time that has passed.

State Aid:

State Aid is a term used to describe financial assistance from the government that benefits a particular business or industry. State Aid is regulated by the European Union and must be approved by the European Commission before it can be granted. Businesses that receive State Aid may be required to repay some or all of the assistance if it is later found to be in breach of EU regulations.

Mandatory and Discretionary Relief:

Mandatory Relief is a type of relief that must be granted by the local authority if the property owner meets certain criteria. For example, charities and community amateur sports clubs are entitled to 80% mandatory relief on their Business Rates. Discretionary Relief, on the other hand, is a type of relief that can be granted at the discretion of the local authority. Discretionary relief is usually granted to businesses that can demonstrate financial hardship or other special circumstances.

Material Change of Circumstance:

A Material Change of Circumstance (MCC) is a change in the conditions affecting a property that could affect its rateable value. Examples of MCCs include changes to the property itself, such as a new extension or alteration, or changes to the local area, such as the construction of a new road or the opening of a new shopping center. If a property owner believes that there has been a MCC that affects their property, they can apply to the VOA to have the rateable value of their property reassessed.

Material Increase in Rateable Value:

A Material Increase in Rateable Value (MIRV) is a term used to describe a situation where the rateable value of a property has increased by a certain percentage or more. If a property owner believes that there has been a MIRV, they can apply to the VOA to have the rateable value of their property reassessed.

Check, Challenge, Appeal (CCA) Process:

The Check, Challenge, Appeal (CCA) process is a system in place for property owners in England and Wales to challenge the rateable value of their property if they believe it is incorrect. The process is divided into three stages: Check, Challenge, and Appeal.

During the Check stage, property owners can view the details of their property's valuation and raise any queries or concerns with the VOA. If the property owner is not satisfied with the response, they can move on to the Challenge stage.

During the Challenge stage, property owners can provide evidence to support their case for why they believe the rateable value of their property is incorrect. The VOA will then review the evidence and make a decision. If the property owner is still not satisfied, they can move on to the Appeal stage.

During the Appeal stage, property owners can appeal the decision made by the VOA to the Valuation Tribunal, an independent body that hears appeals against decisions made by the VOA.

Material Day:

The Material Day is the date on which the Valuation Officer must have all the information they need to determine the rateable value of a property. This date is usually two years before the start of the rating list, which is the list of all rateable values in force at a particular time. For example, for the 2017 rating list, the Material Day was 1 April 2015.

Rating List:

The rating list is a list of all the rateable values in force at a particular time. It is used to calculate the amount of Business Rates that property owners have to pay. The rating list is maintained by the VOA and is updated every five years.

Small Business Rate Relief:

Small Business Rate Rel