New business rate ‘help’ to ‘cost traders £150 a year’
The Government is planning to increase the frequency of commercial property assessments from every five years to three in a bid to make charges more accurate to market conditions.
But proposals could create more red tape - and with it added costs, with £300 million a year spent on paperwork, according to real-estate advisors Gerald Eve.
The new rules also include a requirement for businesses to inform authorities of changes they make to the commercial space within 60 days, and submit annual reports.
Businesses must report every time their rent changes, buildings are upgraded or the occupation of the premises changes.
Gerald Eve said annual reports alone would cost about £150 each if businesses hire a consultancy.
This is more than four times higher than the £35 the Government said the paperwork would cost each year.
Simon Green, head of business rates at Gerald Eve, said: "The Government has quietly pushed out confirmation of the proposed changes to the way business rates information is collated, putting far more burden on businesses who are already stretched and trying to survive during this cost-of-living crisis and economic downturn.
"According to the documents, informing the authorities will only cost ratepayers £35 a year.
"But we have no idea how the Government has come to that figure. A far more realistic estimate would be an average of £150 a year for each and every rateable property, although it could be far higher for businesses that see more regular changes."
How are business rates calculated?
Business rates are calculated based on the property's rental value if it was on the open market. This is estimated by the Valuation Office Agency (VOA).
Business rates relief
Some businesses can receive a discount on their business rates, known as business rates relief.
Business rates relief categories include:
- Small business
- Rural
- Charitable
- Enterprise zone
- Harship
- Retail, hospitality and leisure
- Local newspaper
- Covid additional relief
- Nurseries.
Businesses may also receive a temporary cut in rates if there is severe local disruption such as flooding, building or road works.
Rate relief is slightly different for Scotland, Wales and Northern Ireland, with each devolved nation having their own criteria.
For more information on business rates relief, including for the devolved nations, click here.
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