Business rates query
Discussion
I am after some quick advice regarding business rates before I have a meeting with the local business rates office 
I own and run a small health club which has a gym, spa and treatment rooms. For the past 18 months we have paid the business rates on the property (a scandalous amount of cash but hey hey). Anyway, the treatment side of things really isnt my forte so I am looking to take on another company to run it all. They would let the rooms from me, employ their own staff and completely manage the whole operation and just pay me rent, so all I would manage is the gym/spa side of things and they are basically a business within our property.
My query is this, their "floor space" is about 40% of our total club space and before we finalise the contracts I wondered what should we do about business rates? As there are now two companies operating from the one building, would we continue to pay the full rates for the site and pass on their % of the costs? Or would we get the building re-evaluated and they would subsequently get a bill for their share so to speak?
I own and run a small health club which has a gym, spa and treatment rooms. For the past 18 months we have paid the business rates on the property (a scandalous amount of cash but hey hey). Anyway, the treatment side of things really isnt my forte so I am looking to take on another company to run it all. They would let the rooms from me, employ their own staff and completely manage the whole operation and just pay me rent, so all I would manage is the gym/spa side of things and they are basically a business within our property.My query is this, their "floor space" is about 40% of our total club space and before we finalise the contracts I wondered what should we do about business rates? As there are now two companies operating from the one building, would we continue to pay the full rates for the site and pass on their % of the costs? Or would we get the building re-evaluated and they would subsequently get a bill for their share so to speak?
It would depend on the square footage and when the rates were last reviewed. If the space is small and they are a new business then they may qualify for rates relief on their share. To do this, the building would probsbly have to be reviewed again by the business rates team and that could lead to your overall rate going up or down.
I'd speak to a local surveyor (I know one in Swansea, if you want to PM me, I'll pass on the details) to see what they think the outcome of a new inspection would be.
I'd speak to a local surveyor (I know one in Swansea, if you want to PM me, I'll pass on the details) to see what they think the outcome of a new inspection would be.
A new review probably wouldn't change the amount they charge so I'd probably go with splitting it up into two parts and they pay their own way. If they are terrible payers or go bust in the future then you won't be liable for their share and would even qualify for 3 months relief if they did go through.
If the square footage is below 1000 (IIRC) then they will qualify for small business relief and the smaller the space is, the larger the discount for them.
This is all based on my knowledge of how Cardiff Council rates work, so it may differ a bit where you are.
If the square footage is below 1000 (IIRC) then they will qualify for small business relief and the smaller the space is, the larger the discount for them.
This is all based on my knowledge of how Cardiff Council rates work, so it may differ a bit where you are.
Edited by Dick Dastardly on Tuesday 15th July 09:36
There are different rates for different uses so the figure may go up or down depending on use. Liability I would assume will lie with the owner of the property ??
You should be using a company like Altus Edwin Hill anyway to get your rates reduced. They keep 25% of the reduction (in my case).
If you think Business Rates are bad, wait til you get your water rates - just shy of £6,000 pa with a consumption of £442 last year !!!
You should be using a company like Altus Edwin Hill anyway to get your rates reduced. They keep 25% of the reduction (in my case).
If you think Business Rates are bad, wait til you get your water rates - just shy of £6,000 pa with a consumption of £442 last year !!!
Assuming that your in wales be careful as the rules are different....
Have a chat with Rodhri Poiner here.
http://www.mallard-properties.co.uk/about.asp
Have a chat with Rodhri Poiner here.
http://www.mallard-properties.co.uk/about.asp
Except I am Chrisgr31! 
I also happen to live relatively local to you, actually being in Wealden, although based in central London for work.
As someone has said I would always seek to have separate assessments for each occupier, because otherwise if the tenant doesn't pay the rent you still have to pay the rates and therefore lose out twice.
The only problem is that the total of two assessments can be more than the one. There is small business relief however its not based on the size of the property its based on the rateable value. The rateable value is meant to to represent the rental value of the property as at 1 April 2008, and the current List came in to force on 1 April 2010, however your property may have been assessed for some reason in 2012, with information I currently have I dont know why.
PM the address and post code of the property and I'll be able to comment further. I don't work for the firm mentioned further up in the thread but one of their competitors
and there is nothing wrong with them or indeed many of the competitors, however there are a few hard sell companies that I would not recommend but am not allowed to name.
I also happen to live relatively local to you, actually being in Wealden, although based in central London for work.
As someone has said I would always seek to have separate assessments for each occupier, because otherwise if the tenant doesn't pay the rent you still have to pay the rates and therefore lose out twice.
The only problem is that the total of two assessments can be more than the one. There is small business relief however its not based on the size of the property its based on the rateable value. The rateable value is meant to to represent the rental value of the property as at 1 April 2008, and the current List came in to force on 1 April 2010, however your property may have been assessed for some reason in 2012, with information I currently have I dont know why.
PM the address and post code of the property and I'll be able to comment further. I don't work for the firm mentioned further up in the thread but one of their competitors
and there is nothing wrong with them or indeed many of the competitors, however there are a few hard sell companies that I would not recommend but am not allowed to name.Chrisgr31 said:
Except I am Chrisgr31!
I also happen to live relatively local to you, actually being in Wealden, although based in central London for work.
As someone has said I would always seek to have separate assessments for each occupier, because otherwise if the tenant doesn't pay the rent you still have to pay the rates and therefore lose out twice.
The only problem is that the total of two assessments can be more than the one. There is small business relief however its not based on the size of the property its based on the rateable value. The rateable value is meant to to represent the rental value of the property as at 1 April 2008, and the current List came in to force on 1 April 2010, however your property may have been assessed for some reason in 2012, with information I currently have I dont know why.
PM the address and post code of the property and I'll be able to comment further. I don't work for the firm mentioned further up in the thread but one of their competitors and there is nothing wrong with them or indeed many of the competitors, however there are a few hard sell companies that I would not recommend but am not allowed to name.
Just beware of any 3 letter firms..... And Chris - I was close!I also happen to live relatively local to you, actually being in Wealden, although based in central London for work.
As someone has said I would always seek to have separate assessments for each occupier, because otherwise if the tenant doesn't pay the rent you still have to pay the rates and therefore lose out twice.
The only problem is that the total of two assessments can be more than the one. There is small business relief however its not based on the size of the property its based on the rateable value. The rateable value is meant to to represent the rental value of the property as at 1 April 2008, and the current List came in to force on 1 April 2010, however your property may have been assessed for some reason in 2012, with information I currently have I dont know why.
PM the address and post code of the property and I'll be able to comment further. I don't work for the firm mentioned further up in the thread but one of their competitors
and there is nothing wrong with them or indeed many of the competitors, however there are a few hard sell companies that I would not recommend but am not allowed to name.^^ good advice above.
The only thing I would add is that whilst a split of the premises may be a good idea, you need to be sure that the premises can be split in the first place so that it creates two distinct and separate demises for rating purposes.
I would request an inspection from your local Valuation Office for them to establish the correct way of doing it.
The only thing I would add is that whilst a split of the premises may be a good idea, you need to be sure that the premises can be split in the first place so that it creates two distinct and separate demises for rating purposes.
I would request an inspection from your local Valuation Office for them to establish the correct way of doing it.
soxboy said:
But surely if you're recommending a split the Voa will need to come and inspect anyway? Better to have them on board from the outset rather than wasting time on something that may not be possible.
Always an idea to get the assessment looked at first, most rating surveyors work on an incentive based fee and they'll say if it is too low or not. If its too low they'll say and no fee payable! Also its not unknown for those not experienced to tell the VO something in good faith which then causes them issues later because the VO has misunderstood what they said.
I have seen cases where the VO has been out to a property, remeasured it and increased the assessment by £500 which in reality is daft because we cannot value to that limit, but the VO is process driven these days.
PM ed you. For the benefit of others the OPs property is valued at £45 sq m, the unit next door which is much smaller is at £80 something (cant remember exact figure right now) so there is a danger of the sum of the 2 parts being a lot more than the whole. However in this case the bit to sublet is very small and the RV would be below £6,000 and therefore benefit from small business relief if the tenant qualifies. The sub tenant potentially therefore would pay no rates.
There are other issues on value to with how other nearby properties are valued as well, but that requires a lot more work to investigate.
There are other issues on value to with how other nearby properties are valued as well, but that requires a lot more work to investigate.
Gassing Station | Business | Top of Page | What's New | My Stuff