In what has been billed as the biggest change in a generation, the process of the 2017 business rates revaluation is well under way. Matthew Midwinter, partner and business rates expert, considers how the April 2017 revaluation may affect Bristol’s retail, office and industrial sectors.
What changes are under way?
On 1st April 2017, new rateable values for properties around the country will be implemented. This has triggered a lengthy process, including a number of key dates throughout 2016 and 2017 that the majority of sectors in the city must be aware of.
Draft rateable values were published online by the VOA (Valuation Office Agency) on 30th September, which help organisations to understand their new valuation, whilst providing an opportunity for them to tell the VOA about any errors before the new rates are applied from April. For the first time, this information has only been made available online via the VOA website, and they won’t be sending out printed valuations.
How will it impact the retail, office and industrial sectors?
Most business, whether occupying retail, office or industrial space, are likely to experience a change in their business rates as a result of the business rates revaluation. This is because the valuation date is set two years before the last revaluation and since there has not been a revaluation since 1st April 2010, local authorities in England and Wales are still basing their business rates bills on 2008 figures. This will change next year, as all non-domestic properties in England and Wales will be reassessed based on a valuation date of 1st April 2015.
We have a network of offices across the UK, in addition to Bristol, and work closely with different sectors across the South West which enables us to experience some interesting variations. For example in Queen Square, rents have increased and therefore businesses, including our own office can expect rates to rise. As a rule, office rents are increasing across the city centre, but many retail rates are likely to be unchanged or even reduced.
We have also seen recent increases in office rents across the South West in towns such as Bath. But again, headline rents on retail in and out of town have fallen in recent years. In Exeter, rents have increased across all markets in recent years, albeit some secondary stock will buck the trend, so business should expect their rates to increase accordingly.
There remain areas of Bristol and the South West where rental values for many types of property have not recovered to their pre-recession levels, particularly in the retail sector but also offices and industrial properties and as a result those owners will most likely enjoy newer, much lower rateable values.
Whatever sector a business operates in, you should seek the help of a qualified rating surveyor who can ensure you are on the correct rateable value and advise on any small business rate relief you might be entitled to.
What happens next?
Although the draft rateable values have now been published, businesses will not be able to calculate their new business rates until the Government announces the multiplier in January. New rates bills will be issued on 1st March 2017 and the revaluation comes into effect from 1st April.
The important thing is to seek advice from a qualified rating advisor as soon as possible to make sure you are not paying over the odds. They can assess your draft rateable values and analyse whether you are entitled to a reduction in your business rates.