What is rateable value in 2023?

What is rateable value and how has it changed as of 1 April 2023? What you need to know if you want to appeal your rates bill

Government agency the Valuation Office Agency (VOA) has given every commercial premises in the country a new rateable value, as of 2023, but what does that mean for your business?

It is important when looking at your new rates bill to check the rateable value figure, which is not the figure you pay but is the starting point for how your bill is arrived at.

What is rateable value?

That rateable value (RV) figure is supposed to represent what you as a tenant – whether you actually rent the property or not (you may own it) – would pay to rent the premises you occupy if you had agreed a new lease/rental arrangement two years before, on 1 April 2021.

How rateable value is calculated

So, let’s imagine the RV is £35,000 on your rate demand. The VOA is saying that if you arrived at your actual premises on 1 April 2021 and wanted to you set up your business, you would pay a rent of £35,000 per annum to your landlord. If you actually did that, and you agreed a rent on or close to that date, then your RV at £35,000 is correct and there is little point in appealing that figure.

You will have noticed however, that 1 April 2021, the valuation date used by the Government, actually sits in the middle of the Covid pandemic and, more importantly, we were still in a lockdown.

>See also: Businesses set to pay extra £3bn business rates from April

Should you appeal your rateable value?

So, let’s go back to the original question you should be asking – as at 1 April 2021, would I have turned up “fresh to the scene” (don’t assume your business is there already and you have to rent those actual premises), and what would I have paid to rent those premises on that date? (You need to consider that if you were in retail/hospitality, you could not actually be able to use your premises on that date and, if in an office, your staff were probably working remotely.)

The question is, would you have actually agreed a new rent on 1 April 2021 at £35,000 per annum or would you have negotiated with your landlord rent concessions or actually not rented it at all? If the latter two are the case, then there is probably an argument to say your RV is too high and you should consider appealing.

Check the facts/floor areas are accurate

Most people are aware of the actual floor area they occupy – you may already have had a report before taking the premises or it should be easy, either with a tape or an electronic app, to measure the space you occupy.

You can check this against the VOA valuation by visiting this Government website.

Don’t assume the VOA valuation is correct

The VOA may not have inspected your site for many years, so do not assume its information is correct. If your property is a pub or a property where the RV is arrived at by looking at potential trading information, that will not be available until you start to engage with the VOA through the appeal process.

How do I appeal my rateable value?

Some small business owners ask me if they can appeal the rateable value themselves?

The answer is yes, you can appeal. but do go through the thought process and actions above – look at the RV, check your floor areas and if you think the VOA has made some obvious error, then start the process.

The link you need to follow is here and if you have the time and patience you can navigate through it.

>See also: How to challenge your business rates

Beware of cowboys, crooks and unqualified advisors

Other small business owners tell me that they’ve been phoned by people offering to help.

Please be aware of unqualified rating surveyors who may approach you offering to help. There has been an increase in the number of scams with the publication of this new list.  Anyone who rings you up and tells you they can save you money without knowing your property or having inspected it, is probably one of the above. Just put the phone down, rip up the letter or delete the email.

And if they want money up front, the same applies.

The rating industry is currently unregulated, so it is important to be aware.

Ask them which members of their organisation are members of the RICS/IRRV/RSA – and ask for specific names. Or ask them about the Rating Consultancy Code of Practice.

Seek professional help

You wouldn’t get pension or any other financial advice from someone who rang you up and was unqualified, so why do this with business rates? We suggest you use the information available publicly to deal with queries but if you need help get qualified, professional advice – it will be worth it.

Check your rates bill

Sounds pretty obvious but check for the following:

  • Has it increased from last year’s bill?
  • Has the RV increased?
  • Have caps been applied to my increase?
  • Am I getting Small Business Relief?
  • Am I getting Hospitality Relief?

There are over 10 types of business rates relief that could apply to your rates bill – are you eligible for any of them? You can check here.

What’s changing with the non-domestic rating bill?

The bill had its second reading on 24 April and, while there is a lot to support within it, there are some big potential changes which will not be helpful for business.

You can follow this link to the relatively short debate. Conservative MP for Waveney gives an excellent explanation of the pitfalls.

It’s up to you to keep VOA up to date

One issue that should concern business is the change to put the onus on ratepayers to provide up to date information to the VOA on a regular basis – this could be small building works/change in turnover/change in rent etc. All of these must be provided to the VOA within 60 days or severe fines will arise, with the ultimate sanction being imprisonment.

There will also be an annual requirement to confirm that the information the VOA holds about your property is up to date. While the Government has said this is necessary to deliver more regular revaluations, which we welcome, it does potentially put a large bureaucratic burden on ratepayers when the opposite should be happening.

This requirement will be rolled out for everyone in 2026 but trials will begin before once it becomes law.

John Webber is head of business rates at Colliers

Further reading

What are business rates? A guide for small businessesWhat are business rates, how much are they and do tenants have to pay them? Sophie Attwood of Colliers answers your questions

John Webber

Uriel Cremin

John Webber, BSc, FRICS, is Head of Rating Department at Colliers, a global professional services and investment management company.