Businesses: Don't become April fools
Exeter businesses are being warned they may become “April fools” by sacrificing tens of thousands of pounds in rating refunds and savings if they do not act quickly.
The alert has come from Matthew Midwinter, partner with leading national property consultancy and chartered surveyor Sanderson Weatherall, which has offices in Exeter.
Mr Midwinter explained: “The rates that businesses pay on their premises are linked to valuations which have previously changed every five years. The last such review took effect in April 2010 but the government announced a couple of years ago that the revaluation expected to happen this year would be postponed until 2017.
“Then, last December, the government said if businesses lodged appeals against rateable values on or after 1 April this year, a successful reduction in valuation would mean payment reductions only applying for the two years between that date and the end of March 2017. In other words, refunds and savings would no longer be backdated for the full period since the last revaluation took effect, which has been the practice until now.”
Mr Midwinter said the government was therefore hitting businesses with a double-whammy. Firstly, it had postponed reviewing rateable values which, in many cases, were punitively high, compared to current rental values. Now, it was preventing businesses from reclaiming five years’ worth of over-payments which their successful appeals would have officially confirmed were excessive.
He said: “It’s not surprising, particularly in the light of the earlier blow and the second hit being announced at short notice, that Chancellor George Osborne didn’t choose to highlight the latter in his Autumn Statement and this very significant development for business ratepayers was only revealed in the accompanying paperwork.”
Providing an example of how a business could be affected by reduced payments applying for only two years, rather than seven, Mr Midwinter said: “Sanderson Weatherall recently advised one company in the motor trade on a successful appeal that saw the rateable value of a particular property cut from £207,000 to £162,000. The business will now save more than £122,000, as its appeal was lodged before 31 March 2015.
“But if the appeal had been submitted on or after 1 April 2015, the company’s gain would be less than £46,000, meaning lost refunds and savings totalling over £76,000.”
Mr Midwinter said rates were typically a business’s third biggest outgoing, after rent and staffing costs. It was therefore vital that qualified and experienced rating professionals should examine valuations urgently, with a view to any appeals needed going in before the deadline.
He said: “The clock is ticking and many South West businesses should now be in a race against time to beat it. However, not necessarily through their own fault, many aren’t even at the starting line yet.”
Sanderson Weatherall rating surveyors are carrying out full-scale reviews of all their retained rating clients' properties with the forthcoming cut-off point in mind. Other South West businesses can secure a no-obligation discussion with the firm’s experts on what they need to do before 31 March by contacting Mr Midwinter on 0207 851 2114 or via matthew.midwinter@sw.co.uk
With regional offices in Newcastle, Teesside, Darlington, York, Leeds, Manchester, Bristol, Exeter and London, Sanderson Weatherall employs around 200 people and has a turnover of £14m.
The firm provides a complete range of property, machinery and business asset services across a range of sectors. These comprise retail, residential, offices, industrial, leisure, roadside, healthcare, public sector and third sector.
For further information about Sanderson Weatherall, please visit www.sw.co.uk
