Business Rates - Can my liability be reduced?

Rating assessments are currently based upon 2008 levels of rental value. Of course, the market was much stronger in 2008 than it is now.

In the present climate, new lettings are being agreed at rents which are less than the rateable value of the property. Falls in rental value which are caused by economic circumstances cannot be taken into account when challenging an assessment. However, if there have been physical changes in the locality these may provide valid grounds for reducing your liability.

We have recently seen, and been involved in, a number of cases relating to shops where there have been a number of vacant units in the vicinity. If it can be shown that the vacant shops are having a depressing effect upon rental values then this physical manifestation of an economic factor can be used to justify a reduction in a rating assessment.
With the removal of empty property rates relief, many landlords are looking for ways of reducing their liability in respect of properties which they cannot let out. If there are a number of similar properties in the vicinity which are also vacant this may be a basis for gaining a reduction.

We have also been involved in a number of cases where empty properties have been neglected or have fallen into a state of disrepair. Under Rating Law it must be assumed that a property is in a reasonable state of repair unless it can be shown that it would be uneconomic for a landlord to carry out necessary works. In a period of falling rental values and increasing numbers of competing empty properties, the potential for successfully arguing that works would be uneconomic are increasing.

In all of these cases a Surveyor who is involved in the local market and has ready access to market rents and knows the local market conditions is in the best position to make the strongest case and will have the necessary evidence of rents and of marketing properties to support their contention. Evidence of the actual market is likely to be far more persuasive than an opinion expressed with little or no evidence to back it up.

Peter M Conroy
Trevor Dawson & Company