Business Rates - Fair or Unfair

[surveyor]

Chrisgr31 said:

surveyor said:

There will be some sort of transition scheme that will phase in large increases. But the details are not yet public.

The details are public and can be found at http://www.legislation.gov.uk/ukdsi/2016/978011115...

I do have a more friendly version in the office, I will try and get that posted next week.

Ah Jesus. That link brings back memories of the old days...

[anonymous-user]

I just hope they don't go back on the changes. Our rates are dropping from £600p/m to £91!

[singlecoil]

janesmith1950 said:

I just hope they don't go back on the changes. Our rates are dropping from £600p/m to £91!

There will be several posters on this thread that won't want to hear that

[MadProfessor]

Almost everybody that challenges their rates wins. You can even instruct surveyors who will act on a no-win, no-fee basis and then they take a percentage of the difference in the rates. This will take quite some time and so you end up getting a rebate.

[Chrisgr31]

MadProfessor said:

Almost everybody that challenges their rates wins. You can even instruct surveyors who will act on a no-win, no-fee basis and then they take a percentage of the difference in the rates. This will take quite some time and so you end up getting a rebate.

Yes many surveyors work on an incentivised fee and take a percentage of the saving but you do need to check that the percentage taken is understood. For example is it off actual rates payable or does the small print say something about ignoring transition? Is the percentage reasonable? The percentages vary enormously, is the fee based on 1 year of saving or the 5 year of the revaluation period or any extension that applies. What happens if you move etc. Do your research and read the terms and conditions carefully.

It is also wrong to say that almost everyone that challenges their rates wins, the vast majority do not, and a very small minority actually lose out as their RV goes up.

[Chrisgr31]

singlecoil said:

janesmith1950 said:

I just hope they don't go back on the changes. Our rates are dropping from £600p/m to £91!

There will be several posters on this thread that won't want to hear that

Only too happy for people to see a big reduction in their rates, although it is better when the reduction was negotiated by me!

There is a general suspicion that there will be some changes announced in the Budget, indeed I think Teresa May said in PMQs that something would be said about rates in the Budget. I would expect them to do something about those small businesses who have been benefiting from the small business relief and paying little on no rate, but with the revaluation have had a large percentage increase in rateable value and lost all their small business rate relief. Something tells me they are not going to anything about the 38% increase our office is facing!

[Cu4Heart]

I am on the side, that HMG are taking a complete liberty.

But then our assessment has more than doubled.

The RV has increased 114% (a C. London property over 100k).

The proposed increase in Year 1 in what we are actually paying in 2016/2017: 41%

I am unclear how the transitional relief works exactly and it is proposed to last until we are paying the full amount.

I think the transitional period iseither 3 or 5.

Anyone confirm?

And in each year there will be a cap on how much the increase can be by?

Anyone know what the follow on years percentage increases will be capped at?

I too do not think Hammond will be cutting us any slack but hope springs eternal.

Edited by Cu4Heart on Thursday 2nd March 07:28

[Wombat3]

Chrisgr31 said:

singlecoil said:

janesmith1950 said:

I just hope they don't go back on the changes. Our rates are dropping from £600p/m to £91!

There will be several posters on this thread that won't want to hear that

I would expect them to do something about those small businesses who have been benefiting from the small business relief and paying little on no rate, but with the revaluation have had a large percentage increase in rateable value and lost all their small business rate relief.

In fairness, it would seem unlikely that anyone who had a rateable value of under £6K (the old threshold for 100% rate relief) will have seen that valuation rise to over £15K (the point at which you will now get no discount); or even as far as £12K (the point at which you now start paying something).

If it has happened then the more likely scenario is that they were seriously undervalued in the first place & have been paying less than they should (and unless they were a bit thick, probably knew as much as well!).

[Prolex-UK]

Cu4Heart said:

I am on the side, that HMG are taking a complete liberty.

But then our assessment has more than doubled.

The RV has increased 114% (a C. London property over 100k).

The proposed increase in Year 1 in what we are actually paying in 2016/2017: 41%

I am unclear how the transitional relief works exactly and it is proposed to last until we are paying the full amount.

I think the transitional period iseither 3 or 5.

Anyone confirm?

And in each year there will be a cap on how much the increase can be by?

Anyone know what the follow on years percentage increases will be capped at?

I too do not think Hammond will be cutting us any slack but hope springs eternal.

Edited by Cu4Heart on Thursday 2nd March 07:28

transitional relief is for 5 years reducing each year

I suspect all the government will do is increase the SBRR thresholds (maybe on a regional basis) as a lot of small businesses have gone from paying nothing to paying the full amount as their RV has increased. Where I work that is 438 properties....

They will not be able to change the TR much as the legislation covering that says it must be self funding.

You can see what your old/new RV's are on the VOA website. https://www.gov.uk/correct-your-business-rates

You can also see how it has been calculated. The VOA are still making changes to assessments (not telling the LA's yet :-) )

if anyone needs some advice I will do my best. I am not a valuer just someone who has been doing financial modelling on the new RV's for a large London borough so have a good working knowledge of the calculations involved

[Cu4Heart]

Oh 5 years, that is better than I thought.

So I think the increase in year 2 will be 32%, (from a hansard speech), though it did specify maximum. But if that is the case, year 1 42% increase, year 2 32% increase, that does not leave much relief in the following 3 years.

How do I find out if the maximum increase applicable in year 20 of 32% will apply in year 2, if the initial increase was set at 42%?

Is there no table in the internet somewhere? All my googling just gets the current year situation not the specifics of the follow on years.

It is all very well the VOA giving you a calculator for the coming year but when the increases are so large, some clarity on the following years really is not so much to ask from them is it?

Edited by Cu4Heart on Friday 3rd March 09:55

[Cu4Heart]

The details are public and can be found at http://www.legislation.gov.uk/ukdsi/2016/978011115...

I do have a more friendly version in the office, I will try and get that posted next week.

• **************

I have had a look at the above link posted by, 'surveyor', and it does seem completely on point.

The issue I have is, I cannot fathom the meaning.

Could you post the friendly version 'surveyor', see if my IQ is up to understanding that one?

Cheers.

[Cu4Heart]

Maybe it was ChrisG who posted the link?, I just joined and doing these posts on a itty bitty phone abroad, so forgive my ignorance, whoever has the link to the friendly version, please stand up

[Prolex-UK]

Cu4Heart said:

The details are public and can be found at http://www.legislation.gov.uk/ukdsi/2016/978011115...

I do have a more friendly version in the office, I will try and get that posted next week.

• **************

I have had a look at the above link posted by, 'surveyor', and it does seem completely on point.

The issue I have is, I cannot fathom the meaning.

Could you post the friendly version 'surveyor', see if my IQ is up to understanding that one?

Cheers.

what is your old RV and what is your new RV ?

[surveyor]

Cu4Heart said:

The details are public and can be found at http://www.legislation.gov.uk/ukdsi/2016/978011115...

I do have a more friendly version in the office, I will try and get that posted next week.

• **************

I have had a look at the above link posted by, 'surveyor', and it does seem completely on point.

The issue I have is, I cannot fathom the meaning.

Could you post the friendly version 'surveyor', see if my IQ is up to understanding that one?

Cheers.

That was Chris rather than me... I don't think the legislation has been passed yet... Did a quick search last night.

[Cu4Heart]

Prolex-UK said:

what is your old RV and what is your new RV ?

Old RV £94,200

New RV £206,000

[Cu4Heart]

surveyor said:

That was Chris rather than me... I don't think the legislation has been passed yet... Did a quick search last night.

Ah ok, thanks 'surveyor'. See if Chris pops his head up with the '' friendly'' explanation.

Even the proposed formula would be good to clearly understand over the 5 year, (?), introductory period, of transitional relief as I do not see much changing on the 8th March.

Though it would be helpful if they did bring the increases in at a much slower annual rate of increase.

[surveyor]

Cu4Heart said:

surveyor said:

That was Chris rather than me... I don't think the legislation has been passed yet... Did a quick search last night.

Ah ok, thanks 'surveyor'. See if Chris pops his head up with the '' friendly'' explanation.

Even the proposed formula would be good to clearly understand over the 5 year, (?), introductory period, of transitional relief as I do not see much changing on the 8th March.

Though it would be helpful if they did bring the increases in at a much slower annual rate of increase.

I think I understand enough looking at the draft regulations - but am a little confused to see an additional multiplier in there 'Q' Q is derived from the increase in the Small Business Rate multiplier.... from the preceding financial year (1.02 2017/18). The multiplier is set by RPI (although in recent years the government has chosen to step in and cap the increase).

Therefore I don't think anyone can give definitive percentages beyond 2017/18.

The draft legislation for Large (assessment over £100k where liability increases) says maximum increase in Liability year on year are

2017/18 43%
2018/19 32%
2019/20 49%
2020/21 16%
2021/22 06%

Those are draft figures and beyond 17/18 will be adjusted for RPI increases

[Cu4Heart]

surveyor said:

I think I understand enough looking at the draft regulations - but am a little confused to see an additional multiplier in there 'Q' Q is derived from the increase in the Small Business Rate multiplier.... from the preceding financial year (1.02 2017/18). The multiplier is set by RPI (although in recent years the government has chosen to step in and cap the increase).

Therefore I don't think anyone can give definitive percentages beyond 2017/18.

The draft legislation for Large (assessment over £100k where liability increases) says maximum increase in Liability year on year are

2017/18 43%
2018/19 32%
2019/20 49%
2020/21 16%
2021/22 06%

Those are draft figures and beyond 17/18 will be adjusted for RPI increases

That is really helpful 'S.', so beyond 2017/2018, no one can actually know what the increases will be.

Only, what the individual yearly maximum increase may be.

So 2018/19 might just be a 10% increase and then 2019/2020, 45%" or some other combination.

Really does not help any business trying to plan over 36 months, when the ranges are so flexible.

Will the actual annual increases specifically applied to individual properties get any clearer in advance of the years rates or not?

Even being able to plan the next two years would be good.

I find it annoying, if no further clarity is coming, that basically, it ll be stick your finger in the air time for year 2 onwards.

[surveyor]

Cu4Heart said:

surveyor said:

I think I understand enough looking at the draft regulations - but am a little confused to see an additional multiplier in there 'Q' Q is derived from the increase in the Small Business Rate multiplier.... from the preceding financial year (1.02 2017/18). The multiplier is set by RPI (although in recent years the government has chosen to step in and cap the increase).

Therefore I don't think anyone can give definitive percentages beyond 2017/18.

The draft legislation for Large (assessment over £100k where liability increases) says maximum increase in Liability year on year are

2017/18 43%
2018/19 32%
2019/20 49%
2020/21 16%
2021/22 06%

Those are draft figures and beyond 17/18 will be adjusted for RPI increases

That is really helpful 'S.', so beyond 2017/2018, no one can actually know what the increases will be.

Only, what the individual yearly maximum increase may be.

So 2018/19 might just be a 10% increase and then 2019/2020, 45%" or some other combination.

Really does not help any business trying to plan over 36 months, when the ranges are so flexible.

Will the actual annual increases specifically applied to individual properties get any clearer in advance of the years rates or not?

Even being able to plan the next two years would be good.

I find it annoying, if no further clarity is coming, that basically, it ll be stick your finger in the air time for year 2 onwards.

Assuming the draft legislation is enacted it's a bit simpller. Max increases as above, but each of those increases will be increased each year by RPI increase...

So

2017/18 (43% x RPI - restricted to 2%)
2018/19 ( 32% x R{I Increase)
2019/20 49% x RPI increase)
2020/21 16% x RPI increase)
2021/22 06% x RPI Increase)

So you can estimate closely - depending on how well you can guess on the RPI.

[Prolex-UK]

Cu4Heart said:

Prolex-UK said:

what is your old RV and what is your new RV ?

Old RV £94,200

New RV £206,000

You will get TR of 51938 in year 1 leaving you 47275 to pay.

This assumes you are not in London so have no BRS to pay (crossrail supplement) if you are in London there is an extra 4120 to pay.

I have managed to calculate charges with TR etc for the next 5 years BUT I have made assumptions on the inflation rate (spreadsheet allows me to add what rate govt sets as soon as its made known)