Understanding Rateable Values

Rateable Values are the foundation of business rates, which are a type of property tax levied on most non-domestic properties in England and Wales. Understanding the key terms and vocabulary related to rateable values is crucial for anyone involved in the assessment, appeal, or payment of business rates.

Rateable Value (RV) is the estimated annual rent that a property could be let for on the open market, assuming a willing landlord and tenant, and excluding any rates payable. The RV is determined by the Valuation Officer of the Valuation Office Agency (VOA), an executive agency of HM Revenue and Customs. The RV is usually assessed every five years, in a process known as a revaluation.

Revaluation is the process of updating the RVs of all non-domestic properties in England and Wales, to reflect changes in market rents and property values. The most recent revaluation took effect on 1 April 2017, and was based on rental values as at 1 April 2015. The next revaluation is due to take effect on 1 April 2023, and will be based on rental values as at 1 April 2021.

The RV is used to calculate the business rates payable for a property, using a multiplier set by the government. The standard multiplier for 2022/23 is 51.2p, and the small business multiplier is 49.9p. The business rates payable for a property are calculated by multiplying the RV by the relevant multiplier, and then applying any reliefs or exemptions that may be available.

Material Day is the date on which the Valuation Officer determines the rental value of a property for the purposes of the RV. The material day for the 2023 revaluation is 1 April 2021. The Valuation Officer will consider all relevant evidence up to the material day, including rents, property transactions, and economic conditions.

Check, Challenge, Appeal (CCA) is the process by which ratepayers can challenge the RV of their property. The CCA process was introduced in April 2017, and replaced the previous system of appeals. The CCA process has three stages: check, challenge, and appeal. In the check stage, ratepayers can review their RV and the details of their property. If they disagree with the RV, they can move to the challenge stage, where they can provide evidence to support their case. If the Valuation Officer does not agree with the challenge, the ratepayer can appeal to the Valuation Tribunal for England or Wales.

Valuation Tribunal is an independent body that hears appeals against RVs and decisions of the Valuation Officer. The Valuation Tribunal is made up of a panel of three members, who are experts in property valuation and business rates. The Valuation Tribunal has the power to correct any errors in the RV, or to reduce or increase the RV if it considers that the original assessment was incorrect.

Rateable Occupation is the occupation of a property for the purpose of a business. Only properties that are in rateable occupation are liable for business rates. A property is in rateable occupation if it is occupied by a business, or if it is available for occupation and reasonably expected to be occupied for the purpose of a business.

Empty Property Rate is the business rates payable for a property that is empty and unfurnished. Empty properties are generally liable for business rates at a lower rate than occupied properties. The empty property rate is usually 50% of the standard multiplier, but may be higher or lower in certain circumstances.

Transitional Relief is a relief that limits the increase or decrease in business rates that occurs as a result of a revaluation. Transitional relief is automatically applied to most properties, and is designed to smooth the impact of revaluation over a period of time. Transitional relief is usually phased in over a period of five years, and is subject to certain conditions and limits.

Small Business Rate Relief is a relief that reduces the business rates payable for properties with a low RV. Small business rate relief is available to ratepayers who occupy only one property, or who occupy multiple properties with a combined RV of less than £20,000 (£28,000 in London). The amount of relief varies depending on the RV of the property and the level of occupancy.

Charitable Relief is a relief that reduces the business rates payable for properties that are used for charitable purposes. Charitable relief is available to registered charities, and to other organisations that are established for charitable purposes. The amount of relief varies depending on the RV of the property and the level of occupancy.

In conclusion, understanding the key terms and vocabulary related to rateable values is essential for anyone involved in the assessment, appeal, or payment of business rates. Rateable Values are the foundation of business rates, and are used to calculate the business rates payable for a property. The RV is determined by the Valuation Officer, and is based on the estimated annual rent that a property could be let for on the open market. Ratepayers can challenge the RV of their property through the Check, Challenge, Appeal process, and can appeal to the Valuation Tribunal if they are not satisfied with the outcome. Empty properties and small businesses may be eligible for relief from business rates, and charities may be eligible for charitable relief. By understanding these key terms and concepts, ratepayers can ensure that they are paying the correct amount of business rates, and can take advantage of any reliefs or exemptions that may be available.