The Business Centre Association (BCA) today urges the commercial property market to take immediate action to limit the damage from the 2010 revaluation list, which comes into force on 1st April 2010.
The Valuation Office Agency (VOA) calculates the revaluation on a snapshot of rental values as of the 1st April 2008. As this date was prior to the onset of the recession, it does not provide a true reflection of today’s rental values.
It is estimated that in the West End of London we could see prime rateable values more than double with a rise of 130 per cent.
Rates in Birmingham are expected to rise by 14 per cent whilst properties in Manchester are expecting a rates increase of 13 per cent.
Jennifer Brooke, executive director at the BCA, comments: “It is essential that the flexible space sector and wider commercial property market takes immediate action. Businesses must ensure that their 2005 list assessment accurately reflects their businesses and should appeal for retrospective liability before the 31st March 2010.
“This will assist in achieving a further reduction when the Valuation Office accepts appeals for the 2010 revaluation from 1st April. Businesses who fail to act now could risk severe financial consequences, especially as the VOA has failed to factor the economic downturn into its calculations.”
Despite Government Ministers claiming that the majority of business rates across the country will fall, many flexible space owners will experience a rates increase when the revaluation figures are implemented in April.
Abbey Business Centres has 13 serviced office locations throughout the UK and has been notified that business rates for its key city centre locations, including its Manchester, London and Edinburgh centres, will increase.
Innes Chalmers, finance director at Abbey Business Centres, comments: “Although we have experienced a decrease in business rates in some locations, the majority of our serviced offices are based in attractive, city centres where property valuations were high in the first quarter of 2008.
“As a result, we are set to see a dramatic rise in our business rates throughout much of our property portfolio. The company is currently preparing the evidence base for an appeal in order to show how rental income has been affected since the antecedent valuation date of 1st April 2008.
“The most notable increase in our business rates has been in our City and London West End properties. Here, in addition to this increased tax liability, we also have to contribute an additional supplementary business rate of 2p to the £1 for the Crossrail scheme.
“As the majority of our business centres cater for the SME market we are keen to support the companies using our facilities. However, our ability to assist clients will become restrained if the VOA does not re-think the rates it has set in the 2010 revaluation.”
Mark Higgin, partner at Montagu Evans and rating advisor to the BCA adds: “Ratepayers have received details on the basis on which their property has been assessed by the VOA.
“The first element that should be checked is that the property’s valuation in the 2005 List was correct from the outset.
“In many, if not the majority of cases, the 2010 rates calculation will have the 2009/10 liability as the starting point. For your continued to business viability it is essential you address these issues before 31st March 2010.
“There is, of course, an appeals mechanism, and this has become complex in the