Chinese commercial shop owners need to be aware of changes in Business Rates

By Tiffany Wan – Commercial Property Solicitor

Many Chinese entrepreneurs who own commercial shops and properties will be aware of the recent press coverage over changes in Business Rates.

Outlined here is a basic outline of the background and claimable expenses to hopefully assist businessmen and women to make the best choice for their companies.

Business rates are chargeable on all non-domestic properties such as commercial shops, warehouses, business offices and factories. These rates are collected by the Local Authority.

For each premises the rate is calculated in accordance with the “rateable value” set by the Valuation Office Agency (VOA); this is normally revalued every five years; however, this has been slightly delayed due to the economic downturn and government intention to allow for a period of stability for business owners.

On 30 September 2016 the government released new rateable values to be used from 1 April 2017. This was met with much hostility and many companies including schools and companies with a high street presence felt they were at breaking point. Reportedly some retailers, particularly in the South East region of England, will be seeing rate rises up to 400% after 1 April 2017.

In light of such hikes in prices; Helen Dickson from the British Retail Consortium presented the view that business rates were simply “not fit for purpose in the 21st Century”.  For businesses seeking a revaluation, an appeal can be requested from the VOA and this can be further challenged at a Valuation Tribunal if required.

Commercial landowners will also be aware that since 1 April 2010 the Greater London Authority has also levied an additional Business Rate Supplement to fund the Crossrail transport link. The Business Rate Supplement is applicable to areas within Central/Greater London and only applies to properties with a rateable value of more than £55,001.

For small businesses the rates relief is due to end on 31 March 2017.

Reducing Business Rates for Empty Properties

Empty retail property benefits from a claimable 100% relief for a continuous period of three months.

Empty industrial and warehouse property benefits from a claimable 100% relief for a continuous period of six months.

It should be noted that the property owner is liable for the rates and this extends to include a tenant who has vacated the property but unable to surrender or find an assignee to take the Lease.

For empty properties that are re-let for a minimum period of six weeks and subsequently unoccupied; the owner is entitled to claim a further 100% business rate exemption.

On an end note, readers should also be aware that empty non-domestic properties with a rateable value below £2,600 will be exempt from business rates. From 1 April 2017 this threshold will increase to £2,900.

Tiffany Wan (Solicitor)

Commercial Property – Edwards Duthie Solicitors

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