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Firms face unexpected surge in business rates
A significant increase in rateable values from April 2000 may be an unexpected financial burden for some companies, warns Andrew Duckworth, joint senior partner with North West chartered surveyors, shm Smith Hodgkinson, who advises bosses to build this extra cost into their plans for the future, now.
The Valuation Office Agency is currently preparing a re-valuation of rateable values for all non-domestic properties in England and Wales. As revaluations are only carried out every five years, rates are currently based on commercial property rents dating back to April 1993, whereas the new rates will be calculated on April 1998 values, when many property sectors were rising.
Over this five year period there has been an increase in commercial property rents and both office occupiers and retailers may face substantial increases.
Small businesses are likely to be the hardest hit by the new bills. The Federation of Small Businesses has estimated rate bills account for 13.7 per cent of overheads for small companies, compared to just 3 per cent for larger businesses.
Details of the new rates are expected to be revealed by the Department of the Environment after Christmas. Phasing-in arrangements will be announced at the same time, which may create further problems for some businesses.
The government also proposes to introduce new legislation. One of the most significant proposals is the introduction of time limits which will be imposed on business rate appeals, and will affect backdated payments on overpaid bills.
Companies should seek professional advice as soon as possible to maximise savings that can be made, he added.