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Rates revaluation - pubs must act quickly to avoid fines and red tape, warns BBPA

13/03/15


• From 1st April, publicans to be asked for trading data to feed into business rates revaluation
• Just 28 days to avoid more complex forms
• Failure to respond could also mean higher business rates bills and fines, BBPA warns


The BBPA is alerting publicans that they need to act quickly in response to a looming letter from the Valuation Office Agency (VOA) about their rateable valuation, if they want to avoid fines and unnecessary ‘red tape’.


The call comes because the VOA is now conducting a rates revaluation for the first time in seven years. As a result, from 1st April, it will be writing to licensees requesting trading data that will feed into the revaluation process.


This information will be used to calculate the rateable value of every pub in England and Wales, which forms the basis on which every pub’s Business Rates bill is calculated.


In a change from previous revaluations the data being collected has been reduced dramatically, down to just one page, but there is a catch – the short form is only valid if it is returned within 28 days.


If this form isn’t returned within the four-week period, publicans will face much more lengthy paperwork in order to comply with the process. The alternative form runs to eight pages and asks for much more complex information.


If this second form is not returned on time, then publicans could be facing fines. And if the VOA ends up having to estimate the valuation, this could result in a much higher rates bill that could then take years of effort to change.


BBPA Chief Executive Brigid Simmonds comments:


“To avoid more hassle and unnecessary paperwork, all licensees should look out for this short form from 1st April, and return it as soon as possible. While overall, we will continue to lead the battle for a fairer rating system for pubs, any extra burdens and inconvenience can be avoided by looking out for the short form, and acting quickly to fill it in as soon as it arrives.”


ALMR Chief Executive Kate Nicholls comments:


"The ALMR and BBPA are working closely together to ensure that the latest pub revaluation process is based on the most comprehensive and best possible information about the trade. The ALMR’s Benchmarking Survey shows property costs are the second biggest overhead, particularly for casual dining outlets, and as rates are based on hypothetical trade, it is vital that the calculations are got right, first time. Filling in these new simplified forms gives us the opportunity to do just that.”


Notes to editors:

The British Beer & Pub Association is the leading body representing Britain’s brewers and pub companies. The Association is more than a century old and was originally founded as the Brewers’ Society in 1904. Our members account for some 90 per cent of beer brewed in Britain today, and own around 20,000 of the nation’s pubs.


The BBPA leads calls for a fairer system of business rates for pubs. Key BBPA proposals include:
• The extension of small business rate relief, with the raising of the threshold at which small businesses are defined
• Greater use of rural rate relief to help rural pubs
• More transparency from local authorities, by listing the reliefs that are available to businesses on their rates bills
• Making it easier for pubs to be revalued if their economic circumstances alter


Rates revaluation – questions answered


How will the data provided by publicans be used?
Trading information will be collected by the VOA and will form the basis of the calculation of the property's rateable value. The VOA is developing a methodology, in partnership with expert ratings surveyors, to convert turnover information into an estimate of the rental value of the property. The methodology looks at turnover, split between wet and dry, and other factors such as the amenities and location of the pub. This will then be used to calculate a rental value for the property which becomes its rateable value.


What happens if I don't return the form?
Licensees are encouraged to return the form to ensure that they receive the most appropriate rateable value and therefore, business rates bill. If no data is forthcoming, then the VOA will make an estimate for the pub, which could result in a much higher bill. This could then take years to change.


In addition, there are financial penalties for not returning the form, similar to those for a tax return. The initial fine is £100 for not meeting the 56 day deadline.


How will the data be used?
The trading information will be collected by the VOA and will form the basis of the calculation of the property's rateable value. The VOA is developing a methodology, in partnership with expert ratings surveyors, to convert turnover information into an estimate of the rental value of the property. The methodology looks at turnover, split between wet and dry, and other factors such as the amenities and location of the pub. This then calculates a rental value for the property which becomes the rateable value.


When will this affect my rates bills?
The change to the rateable value will not happen until April 2017. It takes time for all the data to be processed, calculated, checked and then consulted on. From 2017, rates bills will therefore be based on this new rateable value. There will be a chance to query the rateable value allocated to the property from 1st October 2016.


Will my business rates go up?
The final business rates bill is based on a wide range of factors. The Government is committed to maintaining the revenue it receives from business rates, so the overall pool will remain the same. The business rate bill is determined by your rateable value and the ‘multiplier’. If rateable values have fallen across the country then the multiplier will be increased to ensure no drop in revenue, and vice versa.


It is therefore very difficult to work out the impact of changes in your rateable value until the multiplier is set, most likely in December 2016. The most important factor will be the rental value of your property in relation to the average of all properties across the country. If your building is worth less in relation to others compared to 2008, then you will pay less; if it is worth more, then you will pay more. Conversely, you could see an increase in your rateable value and a lower bill, or see a decrease in your rateable value and a higher bill.




Tags:

Pubs, Business rates


For further information contact:

Neil Williams
Head of Media
nwilliams@beerandpub.com
Tel: 020 7627 9156 / 07974 249 779


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