The Chancellor's Autumn Statement
On 5 December 2013 the Chancellor announced a
package of business rates measures.
the Retail Price Index increase in 2014-15 will be
capped at 2% instead of 3.2%.
the doubling of the Small Business Rate Relief
will be extended for a further 12 months until 31 March 2015.
ratepayers receiving Small Business Rate Relief
that take on an additional property which would currently disqualify them from receiving
relief will continue to receive their existing relief for 12 months.
a discount of £1000 for shops, pubs and
restaurants with a rateable value below £50,000 for two years up to the state aid limits,
from 1 April 2014.
a 50 per cent business rates relief for 18 months
- between 1 April 2014 and 31 March 2016 - for businesses that move into retail premises
that have been empty for a year or more.
ratepayers will be allowed to elect to pay bills
over 12 instalments instead of ten; and
95% of the September 2013 backlog in business
rates appeals will be cleared before July 2015.
The Provisional Multipliers for 2014-15
The Chancellor's announcement results in a provisional small
business non-domestic multiplier for 2014-15 of 47.1p and the provisional non-domestic
multiplier will be 48.2p in 2014-15.
The provisional multipliers will be confirmed after either
the local government finance report for 2014-15 has been approved by the House of Commons
or 1 March 2014, whichever is earlier.
Business Rates Appeal Process
The Government has published a consultation paper on
reforms to the business rates appeal process.
The Valuation Office Agency have reduced the number of
outstanding appeals in 8 successive quarter to no less than 170,000 and the Government has
committed to clear 95% of those currently outstanding appeals by July 2015.
Additionally, the proposals in the consultation paper will:
Improve transparency in the valuation process to give
improved confidence in rateable values.
Bring business rates into line with other systems by
requiring ratepayers to provide with their challenge an explanation of why they think the
rateable value is wrong.
Separate the "proposal" stage in the Valuation
office Agency from the "appeal" stage in the Valuation Tribunal.
Business Rates New Build Empty Property
The Government intends to proceed with the
proposal to exempt all newly built commercial property built between 1 October 2013 and 30
September 2016 from empty property rate for the first 18 months. Guidance can be
found at
https://www.gov.uk/government/publications/business-rates-new-build-empty-property
Business Rates
Your new rates year started on 1 April.
Following the Chancellor's Autumn Statement - There is to be a further one year extension
of the temporary increase in Small Business Rate Relief. This means that eligible
ratepayers will receive the increased relief through the whole of 2013/2014 billing year.
There will also be a new measure to extend empty property rate relief for empty new
builds starting on 1 October 2013.
Subject to consultation (the consultation has
ben published), the government will exempt all newly built commercial property completed
between 1 October 2013 and 30 September 2016 from empty property rates for the first 18
months, up to the state aid limits
The non-domestic multiplier (rate in the
pound) for 2013-2014 has been confirmed at 47.1p, with the small business non-domestic
rating multiplier at 46.2p. The Department for Communities and Local Government has
calculted the inflation factor (Q) at 1.027 but it is up to each Local Authority to
confirm that they accept the figure.
Energy Performance Certificates
Any commercial property that is available to
let or is for sale or assignment requires a Commercial Energy Performance Certificate
(CEPC). If there is to be no change of occupier, perhaps when a lease is renewed
under the 1954 L & T Act, then a CEPC is not usually required. There are also
other exemptions. Many companies have been set up to provide these CEPCs but make
sure you are dealing with a qualified Assessor and not just a middle man. Get a
quote first as the costs vary considerably. These certificates also apply to
residential properties.
From July 2011 Estate Agents will become
responsible for ensuring that these certificates are available. At the moment only
owners bear that responsibility. Also the option for the EPC to be in place at the
time of contract will be removed and it will have to be in place at the time of marketing.
Regulations introduced on 9 January 2012
provide for buildings larger than 500sq m visited regularly by the public to display
an EPC.
Change of Use
The government is to allow conversion
of properties with a B1(a) use (offices) to C3 (residential purposes) without a planning
application. There are still many hurdles to overcome not least the physical
conversion itself.
RICS New Retail Lease
RICS announce the launch of a freely available
lease to support small high street retail businesses. The document is a
collaboration with the Bristish Retail Consortium. It provides an easy to use
contract to simplify the process for landlords and tenants.
The lease will be available to download.
Avoid The Courts - Lease Renewals Made Simple
When a commercial lease comes to the end of its
contractual term, negotiations start for a new lease. If these negotiations are not
conclusive the courts get involved. There is another way - PACT [Professional
Arbitration on Court Terms - Ed]. This is a flexible service for the process,
making it quicker, cheaper and more efficient than the courts. All the terms of the
new lease can be determined by a surveyor or solicitor acting either as an arbitrator or
Independent Expert without involving the courts.
Refer to the RICS Dispute Resolution Service www.rics.org/drs for the appointment of an
experienced Arbitrator or Independent Expert, or consult Brandon Simms professional@brandonsimms.co.uk, who is
a trained PACT Arbitrator and Independent Expert, who will be pleased to discuss the
process with you.
The Master of The Rolls, Lord Neuberger says of PACT.
"It is refreshing to see a scheme which embraces the principles of ADR [Alternative
Dispute Resolution - ed] in such a positive way."
All Change In The Courts - Watch those Protocols
The Civil Procedure Rules introduced in April
2000 following the Woolf reforms have changed the way that surveyors and the Courts
interact.
A protocol for dilapidations has been
published. This encourages both the Landlord and the tenant to have detailed
discussions before starting proceedings. The Landlord has to justify any claim with
costings and the Tenant has to provide a valuation if he wants to use the diminution of
Landlords reversion argument. The use of electronic means for producing schedules
etc is being encouraged.
Special arrangements are being introduced to
deal with applications under the Landlord & Tenant Act 1954 and other similar
legislation e.g. Leasehold Property (Repairs) Act 1938. When making an application
for a new lease under the 1954 Landlord and Tenant Act your Chartered Surveyor will have
to be ready to prepare the expert's report in a much shorter timescale.
Unfortunately the costs are still front loaded. Instruct your expert early.
The S.25 Notice now has to include details of the terms for the new lease. These
terms have to be proper and considered.
