CVS chief executive Mark Rigby explains how to claim a reduction in business rates if you feel your trading circumstances have changed
This month business rates went up by 5.77% in England and Wales, representing the highest rise in 20 years.
Business rates are based on the rental value of the premises. But for restaurants, pubs and hotels, receipts and expenditure, or "trade" information, is also used to calculate the bills. However, the information used to calculate current rates bills (in effect from 2010 to 2015) dates back to 2008 and sometimes further, so there is a real chance that recent bills are not accurate or fair.
The Valuation Office Agency (VOA) acknowledges that in some cases its calculations may be based on out-of-date information and therefore allows business owners to appeal their rates bills. Before appealing, the first thing to check is whether the trade information that has been used to calculate your business rates is reflective of a maintainable trade from April 2008.
The smoking ban in 2007 had a big impact on hospitality businesses, in particular those that were wet-led. If the information held by the VOA on your premises is dated before 2007, then it could be possible to prove that turnover - and the rateable value in line with this - has been affected by the smoking ban.
There are a number of material changes of circumstance that caterers and hoteliers can use to dispute and appeal high bills. These are factors beyond your control that could account for lost trade. Such things include:
● A competitor opens a new premises, or extends or refurbishes their existing premises in your vicinity.
● Other local business in close proximity shut down, reducing footfall to the area.
● Public transport is suspended, making it difficult for customers to get to you.
● Major road works or rerouting make your premises difficult to access for a prolonged period of time.
● You close for refurbishment.
The VOA will soon start collecting information to calculate bills for the next rating period (2015-20). The Forms of Return should be with you in the next couple of months and it is a legal requirement to complete them to declare trade and rent information.
In this economic climate, where the price of food and energy are at all-time highs, it is imperative to recoup costs wherever possible. If you feel that the information used to calculate your rates bill is out of date or you have experienced any of the above factors, then you might be liable for a rebate and lower bills in future.