With so many different parts involved in running a business, it can be hard for anyone to keep track of it all. From operational processes to lesser known costs, what seems like a small thing can soon spiral into something much bigger if not handled properly. Business rates are one example, and a business rates review can help make sure you’ve got this right.
With the right experts, a business rates review can make sure you’re paying the right amount. This stops you from paying too little and facing a lump sum later, or it can even help you save money by examining all the different factors and considerations that you might not know about.
It takes some time and effort, but a business rates review is a worthy use of your time, and our experts at Williams Sillitoe can help.
What Are Business Rates?
Business rates are a charge that all business owners need to be aware of. When a property is used for non-residential purposes, business rates will apply. They are, in essence, another form of tax that all company owners need to be aware of and plan for.
Unlike other taxes or payments, business rates are paid to the local authority by the business depending on the commercial property and where this is. They can change every year and a bill will be sent to each location that needs to pay.
The money from business rates fund a range of services across the authority, and contribute to the function, development and community spirit. As an average, most businesses can expect to pay about 50% of their rent on business rates, but this can vary.
What Is A Business Rates Review?
A business rates review looks at how much you are paying in business rates, and compares that against the criteria used to determine what that payment should be. While this can be a simple exercise for a log of businesses, the size of the property can make a difference – as can a number of other factors or exemptions.
These aren’t always easy to find, and a business rates review will determine whether you qualify or meet any of these criteria, as well as helping you figure out what impact this has on your business rates.
What’s Involved In A Business Rates Review?
A business rates review will be between you, the business owner, and a property expert who has the knowledge and expertise needed to advise you on business rates. Together, you will look at the business so both parties have a great understanding of its size, industry, purpose and locations.
With this understanding, you will start by making sure the right multipliers are used to determine what the base cost of the business rates are. From here, you’ll look at any specific conditions or exemptions that are in place or that might apply, and for how long these last.
Who Pays Business Rates On Commercial Property?
Understanding who pays business rates on commercial property is often a confusing point. Some people believe the property owner pays while others think the business owner and leaseholder pays. If you think it’s the responsibility of the other party – whichever you may be – you might find yourself in trouble.
It is the responsibility of the business owner and leaseholder to pay business rates when they are using a commercial property. This is because it is related to your business using the property rather than the building existing itself in most cases.
However, there is a change if the property is empty or not in use.
Do You Have To Pay Rates On An Empty Property?
When a commercial property isn’t being used, business rates are still required – and on this occasion it is the property owner who must pay them. This is because, even while it’s not in use, it has a purpose and some services from the local authority are still required.
That means business rates for an empty property do apply. However, there are exemptions that can be applied for while a property owner is looking for a new tenant. In some cases the cost of the business rates can be lowered, but there is no guarantee. Responsible building owners will make sure they have the funds to cover the full costs should the exemptions not be granted.
How Much Do Business Rates Cost?
As we mentioned earlier, business rates payments will roughly equal about 50% of your property’s rent. As rent rises periodically, either after a period of time or when a lease is renewed, this means business rates will rise, too. You should also take into account what this money is used for by the local authority, as these costs rise, too.
At the time of writing, business rate multipliers have been frozen at 49.9p for small businesses and 51.2p for others. Also at the time of writing, certain industries have discounts that change the payments due, so there are many moving parts.
How Often Do Business Rates Change?
Business rates can change at any time, but in most cases any changes are given far in advance. As this payment reflects the price of renting commercial property, it’s not uncommon to see changes year-to-year, as outlined in three year intervals. This helps provide some stability to business owners, as you can plan ahead, and this can even affect whether you move to a new commercial property.
Business rates were once reviewed every five years, but this has changed, so it’s good to keep this in mind – however that doesn’t mean other changes can’t be announced in the meantime, if something massive impacts the economy.
How Can A Business Rates Review Help?
In a perfect world, you’d be paying the right amount for your situation and property at all times, but there are a lot of factors that can change what you should be paying – and there’s no reason to pay more than you should be.
A business rates review will help you understand every factor involved in determining business rates, and look at which apply to your company and property. This will reveal if you could make savings, which can be a huge benefit by freeing up money for other uses.
However, before starting any review, make sure the person giving you advice is qualified and experienced enough to do so.
Get The Most Out Of A Business Rates Review
Before going into a business rates review, do as much research as you can to make sure you have all the information you can get. While the experts will be able to help you make sure you are paying the right amount, you can make the process much smoother and be aware of the different exemptions or reductions that might be applicable to your business.
When looking to book a business rates review, it’s a good idea to make sure you’re getting the best advice by using an expert. The team at Williams Sillitoe know everything there is to know about commercial property and the rules and regulations for them in the South Manchester and Cheshire areas. If you’d like to know more, get in touch with our team today.