Business Rates: The winners and losers

Guy Gowing, managing partner at Arnolds Keys (Image: Archant)

Up and down the country, firms are anxiously checking the figures to see if their business rates will go up or down with the latest revaluation.

The rateable value, used to set the business rate for the next five years, has been published online by the Valuation Office Agency (VOA) - and not everyone likes what they see.

Companies in affluent areas such as Southwold, in Suffolk, and Burnham Market, in Norfolk, are facing their rates doubling or even trebling - while others, such as King's Lynn and Great Yarmouth, will see their bills cut.

Groups including the Federation of Small Businesses have warned increases are piling pressure on firms already facing rising business costs, labour costs, dividend taxation, and pensions auto-enrolment.

Nick Dunn, divisional partner at Brown and Co. Photo from Gary Naylor (Image: garynaylorphotography.com)

Some have contacted this newspaper to say the hike in rates could threaten their future.

But with time running out to appeal the valuation, experts are warning that businesses must act now – particularly small companies working on tight margins and least able to absorb an increase.

Brown & Co commercial agent Nick Dunn said businesses in towns where rents had risen the fastest since 2010 would be hardest hit.

'Rateable value is assessed on the rents a town could justify and if that has gone up since the last valuation, and things are pushing rents up because it has become a really hot place to be, then the rateable values are catching up,' he said.

Guy Gowing, managing partner at estate agent Arnolds Keys, said fluctuations in the economy and uncertainty around the property market has meant the fixed rateable values have not always represented the current picture.

He said: 'The rateable value is essentially the rent rate of the property for April 2015. It was previously set on April 2008, when we'd had a lot of prosperity. Since then we have had massive upheaval with the financial crash but things have been starting to lift back up.'

Mr Gowing said the rateable value of retail property had seen increases in many areas, though industrial and office space tending to remain similar. But he urged businesses not to ignore the issue.

'It is something people should be worried about - there are some instances where values have increased a lot.

'If you are a business in a market town which has seen its rents go up, and therefore its rateable value go up, but you are running the same business with the same margins it could be very difficult.

'Southwold has seen a big increase. Sheringham has had quite a big increase and Holt has been increasing for some time.'

While there is gloom for some, it is not all bad and Mr Gowing said that across 10 Arnolds Keys properties there had only been an increase of £250 in rateable value.

There is the right to appeal against the business rates, but this must be on a strict set of grounds.

Mr Dunn said it was important for businesses to take advice to understand if they had a valid challenge.

He said: 'I think without a shadow of a doubt there is going to be a lot of anxiety over some of these assessments, especially for the small businesses that will be very concerned if they see in the 2017 proposals that their figures are going to dramatically increase.

'Small businesses in particularly will need to understand that there is an opportunity to look and challenge the figures if they are not right.'

Five-yearly reassessments of rateable value were brought in by the government in 1990 but in 2015 it was decided to give the previous valuations an extra two years, taking the 2010 values on to 2017.

There are a number of reliefs which can be applied for including small business, rural and enterprise zone rate reliefs.

Our graphic shows estimates by business rate specialists CVS of how much each district could cumulatively pay in rates, calculated using the current uniform business rate multiplier, allowing for reliefs.