An estimated £1.5 billion is made aside annually by the government for business rate relief. Even if the number is mind-boggling, every coin has two sides. This may be seen as a pool of money that firms can use if their business rates are incorrectly computed. Of course, this is a good thing, but the business community has to investigate why this number is so high. How often is it for businesses to overpay their business rates, and how frequently do they lose out on a refund or a decrease as a result? How can you contest your company tax assessment? ‘
Business rates are a broken and fundamentally faulty system.
Businesses typically think that they are paying the right commercial property taxes. That’s a plausible assumption, on the surface. Many people trust that their tax is determined depending on their circumstances and seldom dispute the correctness of this. Some taxpayers may even believe they will be alerted if they overpay their taxes by the appropriate government agency. Business rates are an antiquated and broken system because of indifference. A new, time-consuming and time-consuming activity is one that many people avoid.
How is my business rate calculated?
The “rateable value,” based on a property’s open market rental value, size, and use, is calculated by the Valuation Office Agency (VOA), which is in charge of business rates. In the rating list of the VOA, which has typically been updated every five years for properties in England and Wales, rateable values are included.
Theoretically, a simple and consistent system should be created if a property has a rateable value.
To make matters worse, using basic desktop calculations to determine a company’ tax rate ignores a building’s unique characteristics, some of which may qualify it for preferential treatment.
How do I know if I am on the correct business rate?
VOA has a mechanism called Verify Challenge Appeal. Businesses may first check whether their rate is accurate, then challenge if they feel their rate is wrong, and then appeal if the previous procedures have not resulted in a decrease.
While navigating the Check Challenge Appeal might be a daunting task, it can result in significant savings if handled by an expert who can thoroughly examine the details and inspect the property. When it comes to business rates, businesses can’t afford to take anything for granted.
RVA Surveyors has an 85 per cent success record in decreasing our customers’ business rates obligation, which illustrates the frequency of overpaying.
What happens if my business rate is too high?
You may be eligible to get a reimbursement for any overpayments you’ve made since the beginning of the current rating list in 2017, as well as a decrease until the end of this rating list and beyond if you go through the Check Challenge Appeal procedure.
Will the Valuations Office Agency get in touch with me to check I am on the correct business rate?
No. A common drawback of the business-rates system is this. Due to a backlog of Check Challenge Appeal requests, the VOA has been brought to the account via the Check Challenge Appeal procedure. However, the VOA is far behind and has a backlog of Check Challenge Appeal petitions. The VOA and local governments will not contact a firm to examine or minimise its business rates obligations. It is a company’s responsibility to raise a dispute about business rates.
The Government has moved the ratings period to three years. How will this impact me?
Last year’s Autumn Budget indicates that the government plans to move to more regular three-yearly appraisals for the new rating list. Business rates will be reassessed every three years due to this change. There are claims that this would lead to more equitable business rates, but we’ve seen in previous years that the Government may expand or reduce the rating list at any time they like.
According to the VOA’s current rating lists, they’ve had to be changed seven times since 2011. As a result, the system is plagued with doubt and apprehension. Moving to three-yearly appraisals might put a further burden on the VOA, which could worsen overrating and overcharging concerns.
I am due to modify my property. Will this impact my business rates?
Yes. Your commercial property’s rateable value is likely to be impacted if you make changes to the structure. Even if you add air conditioning, build an extension, or enhance the property in any other manner, your business rates may rise or fall depending on the modifications you make to the property.