The valuation office on 30 September 2016 published the draft valuation list detailing the proposed new rateable values for properties in the UK from April 2017.
Richard Jones, Director at Barker Storey Matthews comments ‘The huge growth in rental values in London and the South East since the last rating revaluation in 2008 has meant a shift in the business rates burden away from other areas of the UK. The majority of Peterborough businesses look to be in a position to gain from this valuation.
From an initial look at the valuation list Richard believes businesses should be better off by between £3,000 and £6000 a year. He cites an industrial building with a current rateable value of £12,500 where the occupier in this financial year would be paying business rates of £6050 but under the revaluation the rateable value dropping to say £12,000. Under the new system companies that occupy just one building and are UK registered can apply for small business rates relief and will now pay no business rates from April 2017.
This is a huge boost to small Peterborough businesses and a real encouragement for companies to strengthen and move. Richard went on to say, ‘As a general rule of thumb the best savings will be for office premises under 1000 ft.² and industrial units under 2000 ft.² but also many tertiary and secondary shops will benefit also.
Many larger businesses, who can’t claim the small business relief, may also have some saving. The business rates revaluation weights values towards those areas of the UK that have experienced the highest rental growth. As the total of all the values generally throughout the UK has increased, the multiplier that applies to the buildings rateable value is also predicted to reduce. Peterborough companies will therefore have the double added benefit of not only reduced rateable values but also an overall reduced multiplier.
Although Peterborough has been hugely successful in the last few years in attracting new companies, rents generally have not moved that greatly due to the huge amount of stock in the marketplace when the recession hit in 2008. This has helped to keep rents under control and hence led to a knock on added benefit of lower rateable values, to the benefit of scores of local businesses.
Richard, however, has warned that there are always winners and losers in any rating revaluation and not all businesses will necessarily benefit from the change. There are some hotspots in Peterborough where rents have outgrown the general market and where occupiers may actually see increases in rateable values, although we expect these to be in the minority. It is important to have a firm of specialist surveyors checking if the new rateable is correct if you are a net gainer or loser.
