This month the new rateable values for businesses were announced. If you don’t know what that means, you may have already answered the titular question. In short, the amount each business pays has increased on the whole, to stratospheric levels for some. With these new rates being payable from 2017, and more business rates changes on the way, do you need the advice of business rates professionals to navigate this sea of changes? We look at the proposed reforms to find out.
The ‘devolution revolution’
In his six years as Chancellor of the Exchequer, George Osborne made several announcements concerning the future of business rates. He spoke only in the vague terms and broad strokes, but essentially it seems Osborne intended for local councils to retain all revenue from business rates collected in their territory, and also to have the power to cut rates and drive inter-county competition.
As it happens, Osborne did not stay in his post long enough for any of his changes to come into effect. New chancellor Philip Hammond has so far made few public statements on business rates, though it seems that devolution is still on the cards. As the entire country’s economy hangs in the balance, a considered reform to business rates has never been more important. Hammond may choose to implement Osborne’s still vaguely-drawn ‘devolution revolution’, and he may also keep more welcome reforms, such as relief for small businesses.
How professional advice could help
If Osborne’s planned business rates devolution goes ahead, professional advice will be hugely helpful to any company with locations in more than one council. Professional advice can help a business stay on top of the different rates they have to pay in each area, and the most advantageous areas of expansion. Costa Coffee, for example, work with business rates advisors at My Business Rates to manage their portfolio of over 350 locations. Even if you don’t run one of Britain’s largest coffee chains, getting your head around the practicalities of paying different rates in different areas will be much easier with professional advice.
The new rateable values
The just-announced new rating list could jeopardise the relief granted to small businesses whose properties currently have rateable value of £12,000 or less, since current rateable values are based on 2008 house prices. This fact alone means that a large hike in business rates is on the horizon for firms with high value properties. This hike will come regardless of how much money a business makes. Run a small corner shop that just happens to be on the corner of an expensive street? Your rates will be higher next year, even if your profits are not.
How professional advice could help
Since the government’s own department seems unconcerned with how businesses are affected by these rates, professional advice can lend a helping hand to any business which needs desperately to keep its rates low enough to simply get by. Perhaps there is government relief you could qualify for, even if you don’t think you could. Or maybe it is time for you to move to another location. Advisors could point you in the direction of a building or area where your rate-to-revenue ratio will be more favourable.
With these changes mere months away, professional business rates advice might be just what you need to soften the blow, unless you possess the financial acumen of a professional yourself.