Improve Tenant Experience by Correcting Business Rates

Besides rent, one of the biggest costs facing your tenants will be the business rates charged by the local council.

If you’re looking for new (or improved) tenants, then you’ll need to find ways of bettering their overall experience of renting your property. Discovering ways of keeping the management, running costs, and taxes to a minimum is a great way to do this and will also make the property more attractive to prospective tenants.

One way of potentially lowering costs is by ensuring your properties are correctly valued by the Valuation Office Agency (VOA). The valuations made by the VOA set the business rates, but they are not always correct. Your tenants might be paying too much.

As a proactive landlord, you can take steps to ensure current and future tenants pay the lowest rates possible thus improving their experience as customers to your property business. RVA Surveyors recommend everyone who can should challenge their business rates.

Business Rates: What Are They and Who Has to Pay Them?

Business rates are charged on commercial properties by local councils. In some cases, people working from home also have to pay business rates. This occurs if products are sold in the home or if employees also occupy the space regularly.

Councils charge business rates in order to raise money to fund services they operate in the local area. Business rates bring in around £25 billion per year, spread across all the councils in the UK, which is then used to fund essential local services.

When a property is rented it is the tenant, not the landlord, who is obligated to pay the business rates. The cost can be substantial on large commercial properties in expensive areas, and even on smaller properties the business rates can be a concern to prospective tenants. What’s more, if the space is vacant, it is the landlord’s responsibility to pay the business rates, which is one more reason to ensure you are not overpaying.

How Much Are Business Rates?

Business rates are set based on an evaluation of the market price of a property. Valuations are carried out by the VOA every five years, with the next one due in 2023.

The VOA takes into account numerous factors when undertaking a valuation. Carrying out the nationwide valuation takes many years and the current valuation for 2023 is already underway. Once the VOA has arrived at a value this is translated into a taxable rate by the local councils.

There are situations where tenants can apply for either partial or complete reductions in their rates. If the property they are renting from you falls into one of these categories, informing your tenants of this will save them time and money while improving their trust in your competence as a landlord.

Property worth less than £12,000 is entitled to a complete reduction in the business rates. Any property worth £12,001 and up to £15,000 will qualify for a partial reduction on a sliding scale depending on the property’s exact value.

Further reductions are applicable to specific locations, such as rural properties and properties in enterprise zones, and to properties being used in specific ways, such as the premises of a registered charity.

Beyond these official categories for business rates reductions, you will be required to appeal to the VOA for a revaluation in order to have a chance of lowering the business rates.

Lowering Your Properties Business Rates

In order to protect yourself and your tenants from overpaying, you can launch what is called a check challenge appeal. The appeal is processed by the VOA and a decision will be made by them.

Undertaking an appeal can be challenging and not all landlords have the necessary knowledge to carry it out. If this is the case, an agent can be appointed to carry out the appeal on the landlord’s behalf.

The ideal person to hire for the job is a surveyor, such as those at RVA Surveyors who specialise in business rates appeals. Thanks to their specialist property knowledge, RVA Surveyors are able to carry out a revaluation easily and know exactly what to look for.

A member of the RVA Surveyors team will pay a visit to your properties to carry out an on-site inspection. In most cases, the surveyor will draw up detailed plans of your properties and then look for comparable evidence to build a case against your current valuation.

In addition to knowing how to build a case, RVA Surveyors, who are familiar with the VOA, will be able to present the information in the most compelling manner possible, giving you the best chance of lowering the business rates on your properties.

Once a challenge appeal has been submitted the VOA has 18 months to make a decision. During this time they may negotiate the whoever entered the challenge, either you, the landlord, or a surveyor carrying it out on your behalf.

If you or your RVA surveyor are unhappy with the VOA’s decision then you can appeal. Appeals are decided by an independent tribunal that can choose either side or present a solution of its own. The appeal is a legal process with strict rules. Navigating through it can be challenging and having professionals, like RVA Surveyors, to guide you through the process can be invaluable.

Cheaper Rates, Happier Tenants

If your appeal is successful, and if there have been any changes to the property or the area in the last five years then there is a good chance it will be, you could save your tenants (and perhaps yourself) thousands of pounds.

What’s more, being able to advertise the lower cost of your property to prospective tenants will make it more attractive and increase your chances of finding the right tenants.

Tenants will also be impressed by your proactive attitude towards taking care of their interests and become trusting customers of your property business.

Since RVA Surveyors operate a no reduction no free business model, you’re got nothing to lose and everything to gain by giving them a call and having them investigate your properties.