Business Rates :- would I get away with this?

[plasticpig]

I think it's possible that I have found a way so that my company doesn't pay any business rates.

The company rents two top floor units from a block of 3. So it rents unit 1b and 2b but does not rent 3b. The two units have been joined together to create one unit by knocking a hole in the wall to make a corridor between 1b and 2b. However each unit has a separate:

Landlord.
Access stairwell.
Water supply.
Electricity supply.
Lease agreement.

So everything listed (including rent) is billed separately for each unit. For historic reasons the treatment for rates valuation is as one unit.

There is another company which has a close association with company that rents the units, There is some overlap in shareholders and employees but they are not identical.

What I am proposing to do is to reinstate the divide between the units by means of a locked door. The associated company would then take over the lease of Unit 2b. The companies would then have the rates valuation reassessed as two separate units. The rateable value for each individual unit would fall under the threshold so neither company would pay rates.

If the rate assessor queries the separation by locked door we will show them the dividing wall between 2b and 3b which has a locked door to separate the units... 3b is leased by a company which has absolutely no association with the other two companies.

Opinions on whether we would get away with this? Not sure what legitimate objections could be raised by the council.

Edited by plasticpig on Tuesday 12th September 16:55

[PurpleMoonlight]

Would this be the associated companies only occupied property?

[KevinCamaroSS]

Fraud springs to mind with your idea. Presumably employees of company A occupy both units even though company B leases one of the units?

[plasticpig]

PurpleMoonlight said:

Would this be the associated companies only occupied property?

Yes.

[mikebradford]

I'm aware of companies that appear to have considerablely larger space than you mentioned that is split under different companies such that no rates are payable.

Your scenario appears to be much more genuine, so go for it.

[plasticpig]

KevinCamaroSS said:

Fraud springs to mind with your idea. Presumably employees of company A occupy both units even though company B leases one of the units?

Yes but conversely employees of company B would occupy both units as well. There are cross invoicing mechanisms in place where an employee for company A spends time on a project for company B and vice versa. Most employees are employed by company A for 3 days a week and company B for 2 days a week. This is on a flexi time basis though so it's possible for an employee to work half a day for A and half a day for B.

Two employees are only employed by company A. The remaining employees are employed by both companies. Company B would happily employ the 2 company A employees as well on the same basis as everyone else.

[PurpleMoonlight]

Nothing unlawful about two companies employing the same person and it makes their life easier if they are neighbours.

The associated company will need a tenancy in their own right and some councils demand a copy before agreeing they are liable for the rates.

[7184c]

Sounds fine to me. I would stick an Emergency Exit sign on the door as well just before the surveyor comes.

[KevinCamaroSS]

plasticpig said:

Yes but conversely employees of company B would occupy both units as well. There are cross invoicing mechanisms in place where an employee for company A spends time on a project for company B and vice versa. Most employees are employed by company A for 3 days a week and company B for 2 days a week. This is on a flexi time basis though so it's possible for an employee to work half a day for A and half a day for B.

Two employees are only employed by company A. The remaining employees are employed by both companies. Company B would happily employ the 2 company A employees as well on the same basis as everyone else.

Thanks for the clarification, sounds OK to me then.

[skwdenyer]

In law, there's no need for the locked door. A chalk line on the floor of a warehouse is sufficient.

Not always easy to argue however.