The Valuation Office Agency’s (VOA) and Scottish Assessors’ (SA) preparation for the valuation of new rates assessments in 2005 has been better than ever before. However, it will not have been perfect, and it will still be worth looking closely at your assessment to decide whether an appeal is worthwhile particularly in view of the substantial rate increases facing logistics and distribution operators.
For most logistics businesses, the 2005 Business Rates Revaluation represents the hypothetical rent that might have been paid for the property in April 2003 subject to certain assumptions. If the property is leased, and you have fought to keep your rent down on rent review, you will reap the reward as a rent agreed around 2003 could well be reflected in your new 2005 revaluation and have a direct effect on the rates you will pay for the next five years.
You can appeal against your initial 2005 revaluation and also following any physical changes to your property, known as Material Changes of Circumstance, including:
- A change to a property such as part demolition, split or merger of accommodation.
- A temporary change to the locality, such as disturbance due to nearby road works or other building works.
- A permanent change in the locality – for example, a new development which affects the property’s value
- As a result, you may need to accrue for potential rates liability increases for a far longer period than in the past.
By comparison, time limits are much stricter in Scotland. Scottish Assessors must receive any appeals by September 30, 2005 or within six months of receipt of a revised assessment notice, whichever is latest. Accordingly, Scottish Assessors are also limited in terms of altering assessments and will not be able to increase – and backdate – assessments in the way that Valuation Officers in England and Wales can.
You can choose to manage the appeal yourself, but if you feel that deliberation of whether to appeal or the appeal process itself, is too complex, then details of chartered surveyors with rating expertise are available from the Royal Institution of Chartered Surveyors (www.rics.org.uk).
Appeals can be made by post, fax and email, as well as lodged electronically direct to the Valuation Office Agency’s database. A new requirement in England and Wales for 2005 is to include rental, licence and easement payment information relating to the property on the appeal document. You may want to consider whether the rental evidence is helpful to your appeal.
The VOA will ‘programme’ appeals received according to type of property and location. In October or November 2005, it will publish programmes showing when each appeal will be considered.
The VOA will review the programme annually throughout the duration of the five-year List. Any appeals that are not agreed within programme dates will be set down for hearing at Valuation Tribunal.
The 2000 Revaluation assessments in England, Wales and Scotland were reduced by about 4.6% overall as a result of ratepayer appeals. At Gerald Eve, our success rate is an overall 13.3% reduction on 2000. List appeals and a rate saving for our clients in excess of £1Bn so far. For 2005, the ODPM estimates an overall 4.2% reduction following appeals so even the Government expects that appeals for 2005 will reduce the revaluation total and lead to lower rate payments.
Where the main increases are:
- Southampton shows the highest liability increase in the sample locations at 63%.
- The M25 corridor around London shows increases at around 15% to 20%.
- The North-east shows rises ranging from 9.5% in Sunderland to 19.5% in Gateshead and Washington.
- The North-west shows modest increases in Warrington at 6.5% rising to 12.5% in Manchester.
- West Midlands locations generally show higher increases than the East Midlands, with Birmingham showing average increases around 14.5% and Nottingham 8.5%.
- In Wales, the Cardiff area is showing average liability growth of 17% that will be fully effective in the first year.
- Scotland shows increases ranging from 12.5% to 18% with Aberdeen seeing the highest increases.
John Upton-Prowse is a partner at Gerald Eve. Tel: 0207 333 6248.