United Kingdom
Consider the impact of the 2010 Rating Revaluation
Non-domestic rates are a tax on the right to occupy commercial property and are based upon the rental value of the property. Rating Revaluations are carried out on a five yearly basis and the next Rating Revaluation will come into effect on 1 April 2010 and will be based upon rental values as at April 2008. The Valuation Office Agency ('VOA') has recently published the draft values for the forthcoming Rating Revaluation and details of these are available from the VOA website (www.2010.voa.gov.uk/rli).
Whilst the VOA expect that the average increase in rateable values will be in the order of 15 per cent there is a significant range and certain properties will incur very considerable increases in their rateable value. For tenants and landlords in these locations there will, inevitably, be significant implications as regards cash flows and financial forecasts budgeting and it is important that an early assessment of the potential effects is made as well as the various options available.
A copy of the draft rateable value and a breakdown of the valuation will be sent to all occupiers of commercial properties or the property owners in the coming months. It will be open to occupiers and landlords to file appeals to the new rateable values but appeals may not be lodged until after 1 April 2010. If successful, the outcome of any appeal will have retrospective effect.
Tenants and landlords would be well advised to make an early assessment upon their businesses of the effects of the Rating Revaluation and to conclude upon the course of any action to be followed.