NDNA fights for better deal as many nurseries in Scotland to see huge Business Rates rises
Most nurseries across the UK will see their business rates rise from April 2017, following a business rate revaluation with new Scottish rates recently being revealed.
Crucially, for Scottish businesses, there is only a short window in which to lodge an appeal. They have up to six months following the commencement of the new rates from 1 April 2017. Failing that, the next appeals will not be allowed until the next rating list which is likely to be in 2022.
It’s vital that all Scottish nurseries are aware of this, check their new proposed rateable value and put in an appeal as soon as possible if they want to try to get this rate reduced.
Businesses in Scotland, including nurseries, can find the new proposed rateable value of their property at https://www.saa.gov.uk/ under “to search for a rateable value” on the home page.
NDNA and member benefit partner Lambert Smith Hampton has been researching the full extent of steep rises with members and found that some nurseries will see considerable increases.
In a small sample of nurseries in four major cities, Lambert Smith Hampton discovered the following:
Glasgow: not many big increases, most nurseries appear to have remained at 2010 levels
Dundee: evidence of some big increases, including a 56% increase
Aberdeen: most nurseries have increased by 50% plus and the highest increase was 177%
Edinburgh: big increases for nurseries, generally over 70% but the highest increase was 147%
Nurseries in more rural areas will also see big increases, typically being over 20%, with some seeing their rateable values doubled.
Regulations in Scotland are designed to limit rights of appeal, and appeals may only be entered in the six month period between 1st April 2017 and 30th September 2017 . This is in direct contrast to England and Wales where appeals may be made at any time in the five year revaluation period. It is imperative therefore that a decision to appeal is made quickly and professional advice is available from business rates surveyors to assist with this. Failure to act could result in excessive rates being paid in the five year period to the next rating revaluation in 2022.
With this research, NDNA will be pushing for the new rating assessments 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.
Frequently asked questions
Who do the changes affect?
The changes to rateable values affect all businesses in Scotland and across England, and Wales. Currently nurseries in Scotland can check the https://www.saa.gov.uk/ and those in England and Wales can check the VOA website to see their expected rating assessments, which will be effective from April 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 property types. This is likely to be the result of an increase in rental values paid for nursery accommodation between 2008 and 2015, as business rates are based on the rental values of properties.
What should Scottish 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. There is only a very narrow window of opportunity available to do anything about excessive rating assessments and professional advice can be invaluable in minimising the rates that you pay.
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?
Yes nurseries in Scotland can only lodge appeals within the first six months of the new rating, ie. up to 30 September 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. Read more in our Knowledge Hub.