It took them some time, but our two prospective PM candidates eventually realised the importance of business rates in the race for Downing street. Both have already called to slash the tax in a move specifically aimed to appease the high street. Many commercial properties can’t keep up with the soaring costs of doing business.
Anyone that owns a bricks and mortar business will know that the cost of enterprise is rarely in the price of the property itself, rather the business rates attached to that property.
This rings doubly true for businesses that require a physical presence to operate. Pubs have reported an estimated closure of 70% over the winter due to the sudden rising costs of doing business.
But what causes business rates to rise? It’d be natural to assume that profitable turnover would influence business rates much in the same way that corporate tax operates, but this is not the case. Instead, as business rates operate on open market rent, fluctuations in liability can occur for things completely out of the business owners control. Aspects taken into account include accessibility, the changing popularity of an area, or the activity of competitors.
This should be manageable if business rates could be forecasted, but sudden significant increases during new revaluation periods can see businesses rapidly priced out of the area.
It’s not just environmental changes that can increase your rates bill, business owners need to take into account any refurbishment they conduct on the property as it can also increase the rateable value. When trying to keep developments in line with your profit margin, this could seriously hamper your progress. In these situations it’s always best to consult a professional first, to prepare yourself for any nasty surprises.
While business owners should be prepared for an event in which their business rates have increased, it can work the other way round. For all the reasons covered above and then some, you may well be paying considerably more business rates than you need to. Sometimes open market rent can work in your favour if a recent business rates appeal in your area has been successful. Or if environmental factors out of your control have hampered your trade.
Politically, business rates are a hot topic at the moment, with many business owners struggling to keep up with the costs.
A business rates advisor can help to reduce your liability by conducting a financial survey of your property and business, and making an assessment of the amount you should be paying. This can be an invaluable service for business owners who are struggling to keep up with the costs of running their business. In addition, a business rates advisor can also offer other services such as dispute resolution, which can help to reduce the amount you owe even further.
As a result, using a business rates advisor can be a great way to reduce your business rates liability.