31 March deadline for backdated rate appeals could affect Oxfordshire businesses

Robert Sears of RSD

Robert Sears of RSD - Credit: Archant

Robert Sears of RSD commercial explains why firms could lose out on 5 years backdating with new rules on rateable value appeals.

Many commercial ratepayers are facing a potential loss of 5 years’ worth of rate savings unless they lodge an appeal by 31 March 2015.

In a less well publicised part of the changes to business rates made in the Government’s Autumn Statement on 3rd December, was an important amendment to the rules governing Business Rates that could have an effect on Oxfordshire businesses. It announced that for a rating appeal submitted after 31 March 2015, any refund due will not be backdated for the period 2010 to 2015. Instead the Government will only adjust the Rateable Value of a commercial property for the two year period from 1 April 2015 to 31 March 2017.

Robert Seares of RDS Commercial said, “These new rules mean that commercial ratepayers making a successful appeal after 1 April could lose 5 years’ worth of rates savings, possibly amounting to up to 70%. Any commercial ratepayer who thinks the rateable value of their property is too high, would be well advised to submit an appeal before 31st March so that any reductions are backdated to 2010.“

Properties had their rateable value set back in 2008 when rental levels were volatile and so could still be paying excessive business rates. Each property is considered individually and may have factors affecting its rental value that should reduce the rateable value.

A property’s rateable value can also be affected by a variety of physical changes to the property or the locality which may justify a reduction from the date from which they occur. Known as ‘Material Change of Circumstances’, these changes include making alterations to the property or how the property is used, or new roads or changes to access routes or building developments in the vicinity that affect the business.

A recent ‘material change’ in Oxford city centre which may reduce rateable values is the closure of the Westgate Car Park on 5th January 2015 for works in preparation of the redevelopment of the Westgate site. Work on the retail development could start next year but businesses affected by the Westgate development could endure up to 4 years of disruption before the building project is completed.

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Mr Seares commented, “If the Valuation Office Agency becomes aware of a material change, they look at how it affects the rental value and whether this means the rateable value needs to be adjusted. We would encourage any Oxford business near the Westgate development to consider appealing against their current rateable value.”

He concludes, “We would encourage every business that hasn’t already checked that they are paying the correct amount in Business Rates to do so by 31 March 2015. This will ensure that if a rate reduction is agreed for any reason, they are able to secure a reduction for the full seven years rather than just two.”

RDS Commercial is an independent, commercial property company combining extensive experience in retail, offices, industrial and specialised properties with first-hand knowledge of Oxfordshire. They provide advice on Rating Appeals, Lease Renewals, Rent Reviews, Commercial Property Audits & Purchases and other aspects of Commercial Property Consultancy. Robert Seares is a Chartered Surveyor with a post qualification Diploma in Rating and a former Chairman of the RICS Rating Diploma Holders Section. He was a recent President of the Rating Surveyors’ Association and continues to serve on the national committee.