The Valuation Office Agency's (VOA) review of Rateable Values for all properties will affect Business Rates bills from 1 April 2010. Relief and deferment have also been amended for limited periods.

Most non-domestic premises incur business rates, which are generally payable by the occupier. Occasionally landlords include rates within the rent and pay the business rates themselves. Non-occupying proprietors are liable to pay business rates for their empty properties once their period of empty property relief expires.

Business rates do not generally apply to residential lettings, which are instead liable to Council Tax. However business rates can apply to holiday lettings, Bed and Breakfasts and guesthouses if they exceed various limits. Business rates do not apply to places of religious worship, farmland and farm buildings, parks, sewers, fish farms, moveable moorings and some premises used by the disabled.

Business Rates are calculated using a multiplier together with each premises' individual Rateable Value (RV). The RV is calculated by the VOA which sends notice to the occupier after each reassessment. The RV is reviewed at least every 5 years and also upon any extension to the property, installation of air conditioning or change of use. You can search for the current RV of your property on the VOA's website www.voa.gov.uk/business_rates. You should:

• notify the local VOA of any extension, installation of air conditioning or change of use to avoid receiving large demands for backdated rates



• for your own budgeting prior to commencing any of the above, check with the VOA what effect any such development will have on your business rates prior to committing yourself to the development.

The VOA reassesses the RV of each premises (the Ratings List) every 5 years and the next date for review is 1 April 2010. In fact the VOA carries out its calculations prior to this and is expected to issue its initial assessments this Autumn. If you do not agree with this assessment you can contact your local VOA office and ask for an explanation and discussion. If you are still not satisfied you can obtain your own agent's assessment and raise an appeal.

The RV is assessed on what the VOA calculates to be the expected annual open market rent of each premises on a given date. Its uses a date 2 years before each 5-yearly reassessment date so on 1 April 2010 it actually uses 1 April 2008 as the relevant date. However the effect on your bills does not become effective until 1 April 2010.

A change in your premises' RV will affect the amount of your business rates. However whether or not this increases or decreases your bills will depend on whether or not the England-wide standard multiplier (Uniform Business Rate) increases or decreases. Small premises (defined below) attract a smaller multiplier.

A significant increase or decrease in your RV every 5 years would have a large immediate effect on your bills. However the Government usually cap the amount by which business rates can increase or decrease each year. This has the effect of spreading the increase in stepped increases for the 5 years with the full revised RV used in the fifth year.

The last general re-assessment in 2005 affected the business rates payable for 2005 to 2010. The caps on any increase were spread unevenly over the first 4 years only, without a cap on the fifth year. The jump in business rates for some occupiers from 2008/9 to 2009/10 could have been significant.

The Non Domestic Rating (Deferred Payments) (England) Regulations 2009 which came into effect at the end of July 2009 mean that occupiers of small premises (with a RV under £15,000, or £21,500 in London) can apply to defer paying 60% of the increased business rates, if unpaid, and instead spread the payments equally over the years 2010/11 and 2011/12, if they qualify.

You can only apply for this if your billing authority sends you an offer to do so. It is expected the authorities will be doing so in the next few months. You must then apply in a prescribed form. The deferment lasts for so long as you continue to occupy the premises.

With the fall in the Retail Prices Index it is predicted the multiplier, and therefore many bills for business rates, will reduce from the 2010 level. This will give an opportunity to make up the payments for this year within the next 2 years.

The Business Rates Supplements Act 2009 was enacted at the start of July and permits the introduction of powers for county councils, unitary authorities and the Greater London Authority to add 2 pence for every pound of RV onto business rates to fund large infrastructure projects. You may see such increases to your business rates bills in the future.

As a reminder, you should now be aware that from 1 April 2008, limits were imposed on the relief from business rates for empty premises. 100% relief can be claimed for:

• unoccupied Industrial and Warehouse premises for only 6 months and



• for all others for just 3 months

and thereafter full business rates are payable. However, a one year exemption from Business Rates has been granted to empty small premises (with a RV under £15,000, or £21,500 in London) for the period 1 April 2009 until 31 March 2010. This does not affect any liability for rates until 31 March 2009.

If you require any further advice or assistance please contact John Southan or a member of the Property team at Wortley Byers on 01277 268357 or jsouthan@wortleybyers.co.uk.

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