Business rates are a significant cost for any business, but with the draft list announced that will be the framework for the 2023 rating list, it's more essential now than ever for business owners to ensure they are paying the correct amount. Warehousing, logistics, and industrial spaces in particular are facing significant rises, with an average increase of 27%.
So as the cost of doing business increases, there has never been a more important time for the industrial sector to better understand their business rates and know what to do if they might be overpaying.
One way to ensure business rates are assessed correctly is by using a business rates agency. These agencies specialize in assessing and appealing business rates, helping businesses to lower their overall costs.
But what has caused such a significant rise in the first place?
One major reason for the increase in business rates for industrial units is the growing demand for industrial space. As businesses continue to expand and grow, they require more space to store and manufacture their products, leading to increased competition for industrial units. This increased demand drives up the value of industrial units, which in turn leads to higher business rates.
While this sounds fair, there have been other factors at play, influencing the new rating periods' business rates, that have been justifiably contested within the logistics sector.
The government has used rental values taken in 2019, where industrial spaces were at a skewed premium due to COVID-19. While it’s true that many logistics operations flourished during the pandemic, the same can’t be said for every business in the warehousing sector. As such, this broad-brush method of taxation could risk putting many companies out of business.
Additionally, local governments often use business rates as a way to generate revenue. As the cost of providing services to communities increases, local governments may raise business rates to offset these costs. This can also be in response to a decline in other revenue sources for local government.
To alleviate rising costs, businesses should look to appeal the draft list and do so before its estimates come into effect on the 1st of April 2023. And there’s no better way to appeal than to use a RICS-regulated business rates specialist.
A business rates agent is a professional who specializes in navigating the complex process of assessing and appealing business rates. They have a deep understanding of the local tax system and can provide valuable advice on how to reduce business rates. They can also help businesses to understand the different reliefs available, such as small business rate relief empty property relief, and advise on how to apply for them.
One of the main benefits of working with a business rates agent is that they can help to negotiate a better deal with the local government. They can present cases clearly and persuasively and can provide evidence to support arguments for a lower assessment. This can help to save thousands of pounds in business rates over a rating period.
Commercial Property Advisors are business rates specialists, currently working closely with many businesses within the warehouse and logistics industry to secure more accurate and fair business rates assessments. CPA are regulated by the royal institute of chartered surveyors and are members of the United Kingdom Warehousing Association.