REVALUATION 2010 Exeter Make business rates your business

Transcription

1

2 REVALUATION 2010 Exeter Make business rates your business Eric Gilbert Group Revaluation Manager Rod Oakes Valuation Surveyor Exeter South West Group Valuation Office Agency

3 What the VOA does Central government Executive Agency Professional property valuations: 1.8 million non-domestic rateable values for business rates 115,000 Non domestic rateable values in South West Group 22 million domestic council tax bands 1.35 million in the South West Group 153 local housing allowance zones 75,437 (2008/09) fair rents for private rented sector tenants Property valuations for HMRC tax purposes Strategic asset management and energy performance certificates for the public sector

4 Exeter Valuations 5000 Valuations in total 1425 Shops, Banks and Post Offices 1550 Offices 450 Industrial & Warehouse Properties

5 Business rates the basics Tax paid on business premises and other non-domestic properties Nationally pooled, then redistributed between local authorities in proportion to adult population Funds contribute directly toward cost of local authority services More information at:

6 Business rates who s who This is set by the government Business rates bill EXAMPLE rateable value 20,000 multiplier bill total 8,260 This is set by the Valuation Office Agency This is calculated and collected by the council Valuation Office Agency assesses rateable value Communities & Local Government / Welsh Assembly Government sets policy framework, rate reliefs and national multiplier Local Authority uses rateable value in calculation of rates liability, applies reliefs/discounts, issues bills and collects payments

7 How do we value? Rateable value is our assessment of the rental value on a set date Gather and analyse rental evidence and property information to set rateable values In some cases we use trading receipts to establish rateable value in others we use building and land costs Aim is always to establish rental value

8 Applying the rateable value For offices and industrial properties, rent generally distributed across different parts of the property on /m² basis workshop area office

9 Shops are slightly different In a shop the front part is the most valuable this becomes zone A /m² reduces across the retail area as you move further back from the front A B C office retail area storage

10 Revaluation The five-yearly revaluation maintains fairness in the rating system by redistributing liabilities according to any differential movement in values that has occurred in the market over the five-year period Has taken place regularly since 1990

11 Not about increasing taxes! An increase in rateable value does not necessarily mean an increased rates bill The national multiplier is the other key factor used by local authorities to calculate rate bills Multiplier adjusted so that the total business rate stays the same, only allowing for inflation In England the multiplier for 2010/11 will be 41.4p, down from 48.5p in 2009/10 In Wales the multiplier for 2010/11 will be 40.9p, down from 48.9p in 2009/10

12 Hypothetically speaking 2005 rateable value - 14,800 14,800 x = 7,118 notional liability 2010 rateable value - 17,489 17,489 x = 7,118 notional liability

13 Revaluation 2010 key dates 1 April 2008: common valuation date 29 May 2009: rateable values delivered to clients (CLG and the Welsh Assembly) 30 Sept 2009: draft lists published online October 2009: new valuations delivered to most ratepayers Early 2010: local authorities issue rate bills using new valuations 1 April 2010: lists published new valuations effective

14 What is rateable value? Based on rental value at a set date Date set by central government For new valuations 1 April 2008 Key Assumptions Vacant & To Let

15 1 April 2008 values why? 2 years prior to effective date Allows time to research rental evidence Prepare and publish valuations Common date ensures fairness and is the same for all ratepayers Rental values in 2010 may be lower than they were in 2008 but: new multiplier will be set new rates bill will depend on how rateable values have changed relative to each other since the last revaluation, not on changes in the rental market between 2008 and 2010

16 The effect on bills by region Region Bill before reval Bill after reval % change London 5,765m 6,330m 10% South West 1,790m 1,840m 3% Central List 1,125m 1,155m 3% North East 835m 825m -1% Yorkshire & Humber 1,885m 1,860m -1% North West 2,655m 2,590m -2% East of England 2,245m 2,180m -3% South East 3,530m 3,345m -5% West Midlands 2,070m 1,930m -7% East Midlands 1,555m 1,395m -10% Total 23,450m 23,445m 0%

17 The effect on bills by region This is before transition and other reliefs are taken into account There will be variations within the region, based on local conditions and the type of property involved

18 The effect on bills by region before transitional relief tbc -1% -2% -1% -10% -7% 3% -5% -3% Overall change: 0% London 10% KEY: -10%- -6% -5%- -1% 0% 1%-5% 6%-10%

19 The effect on bills by region after transitional relief tbc 0% -1% -0% -4% -3% 1% -2% -1% Overall change: 0% London 3% KEY: -10%- -6% -5%- -1% 0% 1%-5% 6%-10%

20 The effect on bills by sector Sector Bill before reval Bill after reval % change before transition Offices 5,045m 5,280m 5% Central List 1,125m 1,155m 3% All others 6,465m 6,620m 2% Retail 5,805m 5,835m 1% Industry 5,005m 4,555m -9% Total 23,450m 23,445m 0%

21 What about the credit crunch? We have to have regard to economic circumstances as at 1 April 2008 This was a time when Working age employment rate was 74.9% - currently 72.4% Although Gross Domestic Product (GDP) increased by 0.6 per cent in the second quarter of 2009 it is still 5% lower now than 2nd qtr of 2008 RPI was 4.2% - currently 2.9% (December 2009) The Bank of England interest rate was 5.25% - currently 0.5% VAT was 17.5% - currently 15% (01-Dec-2008 to 31-Dec-2009) Woolworths, Principles, Birthdays & MFI were still trading (only Dolcis/Stead & Simpson ceased trading pre-avd)

22 The Bank of England rate changes 05/03/ % current rate 05/02/ % 08/01/ % 04/12/ % 06/11/ % 08/10/ % 10/04/ % 07/02/ % rate at R2010 AVD 06/02/ % rate at R2005 AVD

23 What are the likely effects? Market generally fairly buoyant over the 5-year period between 1 April 2003 & 1 April 2008 Remember, we are looking at rental values as at 1 April 2008

24 Business rate reliefs and discounts Transitional relief for 2010 list Small Business Rate Relief small business rate multiplier percentage discounts Additional reliefs for charities, some nonprofit and some rural businesses What does this mean for ratepayers in Exeter?

25 Example rateable value - 8, rateable value - 16,000 Existing rates bill (assuming small business rate relief is claimed) /11 rates bill (assuming small business rate relief is claimed and including transition) 3984

26 Example rateable value - 9, rateable value - 15,500 Existing rates bill (assuming small business rate relief claimed) /11 rates bill (assuming small business rate relief claimed, including transition) 4581

27 Example rateable value - 12, rateable value - 20,000 Existing rates bill (assuming small business rate relief is claimed) /11 rates bill (including transition) 6809

28 Communicating the revaluation VOA working to raise awareness and understanding of the revaluation and the implications for ratepayers Ensure accessibility to accurate information Fact sheet with bills Business events Trade associations content for publications and websites Reduction of avoidable contact saving time and money for both sides

29 October 2009 the new valuations

30 October 2009 the new valuations Breaks down the rateable value Indicates what to do if anything by when Offers choice of channels to contact us through NOT the bill. An indication of the new bill will be available at: estimatemyrates

31 Licensed trade valuations Sent for the first time for 2010 revaluation Will carry details of levels of fair maintainable trade at the valuation date Working with licensees and representatives to support understanding

32 Checking the new rateable value

33 Checking the new rateable value Development of online site to enable ratepayers to check and compare their new valuation More intuitive navigation More background information Online support More detailed enquiries can be raised electronically Will be accessed via Dedicated helpline for people without web access:

34 Summary Valuation Enquiries 7,500 Enquiries for South West Group 208 Enquiries for Exeter 38 currently outstanding (15 factual and 23 valuation related)

35 Resolution at first point Ratepayers will still call their council with questions Often want simple answer to simple question VOA providing briefings for local authorities Revaluation Enquiry Guide REG available on the website

36 Further information General revaluation information Information on the whole business rates system and an indication of individual rates bill Central government departments with responsibility for business rates

37 Getting professional advice Make a choice, not a mistake Guidance is available on how to chose a professional ratings advisor

38 Getting professional advice If you seek professional advice ensure they are reputable Royal Institution of Chartered Surveyors (RICS) Institute of Revenues Rating and Valuation (IRRV) The Rating Surveyors Association Don t pay or sign until you are completely sure

39 Questions?