Rating Revaluation 2017 Update: NDNA is fighting your corner on business rates
Revaluation information and support
Most nurseries across the UK will see their business rates rise from April 2017, following a business rate revaluation by the Valuation Office Agency.
Businesses including nurseries can look themselves up and check the new rateable value of their property at www.gov.uk
– search for ‘VOA business rates’ to find the calculator.
NDNA and member benefit partner Lambert Smith Hampton have been researching the full extent of steep rises with members and found that some nurseries will see considerable increases.
In a sample of 236 member nurseries with rateable values of £15,000 or above, the overwhelming majority of nurseries’ values had increased, apart from on average for most nurseries in Wales or Newcastle upon Tyne. Increases were typically 39%, well over the average for all property types of 9.1%. In Wales, all property types have reduced by an average of 2.9%.
With this research, NDNA will be pushing for the new ratings to be reduced en masse to acknowledge the tough cost increases already facing nurseries, such as those associated with National Living Wage and pension auto-enrolment.
Who do the changes affect?
The changes to rateable values affect all businesses in England, Wales and Scotland. Currently nurseries in England and Wales can check the VOA website to see their expected rating assessments, which will be effective from April 2017.
When will Scottish members know their new values?
Scottish rating assessments will probably be made available before they become effective in April 2017.They are likely to be available to view in about January 2017.
Is the revaluation good or bad news for nurseries?
For most, it is bad news. According to Lambert Smith Hampton, nursery businesses have been hit harder than most which is a reflection of increasing rental values – in effect, nurseries are now paying higher rents than in 2008 and so will also be paying higher rates in future.
What should members do now?
Lambert Smith Hampton, a commercial property consultancy which has helped many NDNA members to reduce their business rates, advise that owners and managers check their new rating assessment. In theory, they could discuss it with VOA but in practice but it is likely that businesses will only be able to lodge appeals from April.
Is there anything nurseries can do in the meantime?
Nurseries concerned about their new rating assessment should firstly try to get their current rates reduced. It is still possible to enter an appeal and savings can still be backdated to 2015. A reduction in your current rates is likely to lead to a speedier resolution of any appeal made against the new 2017 revaluation assessment. Before taking action however nurseries should firstly be certain that their appeal will result in a reduction, as both the VOA and the Scottish Assessors Association have the power to increase rating assessments if they think they have made an error. It is therefore advantageous to have professional advice at this stage.
What are the advantages of using an agent?
Firstly, make sure any agent is reputable. Look for Royal Institution of Chartered Surveyors affiliation, be wary of ‘up front’ fees, make sure you understand the charge you will pay and read the small print. Reputable agents will value premises, undertake all appeal work, make representations on a nursery’s behalf and ensure deadlines are met. They will also discourage appeals if they don’t believe the action will result in a reduction. Lambert Smith Hampton offers discounted fees to NDNA members.
Is there a time limit on appeals?
It appears likely that businesses in England and Wales will be allowed to appeal the 2017 rating assessment until the next revaluation in 2022 but Scotland is likely to follow current practice of only accepting appeals within the first six months of the new rating, ie. up to October 2017
How long do appeals take to go through?
Appeals can take up to two years. However, on achieving a successful appeal, refunds should be backdated to April 2017.
Nurseries provide a public service and NDNA has been campaigning for years that this service should be recognised with 100% relief on business rates and zero rated VAT.
NDNA recently pushed for burdens to be reduced on nurseries in our response to the Red Tape Review, and in response to our 2015 Annual Nursery Survey the former Childcare Minister encouraged local authorities to discount their business rates.
Members can find a template letter
to send to their MP or AM regarding rates and VAT on the NDNA website, and can also benefit from a discounted business rates review and appeals service with Lambert Smith Hampton.