Business rates exemption?

Sonofa

Sorry if this is the wrong place to post this, but I think the people with the right experience might be here.

I'm looking to rent a secure compound with a couple small buildings, but not for commercial use.

This has been a landscaping business previously so the buildings are just a concrete paneled garage and a workshop which is essentially just another concrete paneled garage, just longer but also has electricity and water to it. There also seems to be a portaloo, in permanent residence, so I'm assuming there is possibly drainage/sewerage to the compound too, if that's relevant.

My reason for wanting to rent this is only really for the off road parking (we don't have any and this is conveniently close to home for our cars), a place for some storage and if I'm honest, the workshop would be a pretty good man cave for tinkering in.

I was surprised that there was water and electricity on the site as I'd assumed that it had neither. Had a brief chat with the owner and he said it's £x per month plus rates. He couldn't tell me what the rates cost would be.

To be honest, I didn't think to ask in more detail at the time, but just assumed water and electricity came under his general term of 'the rates'. Naive I know, but no experience of renting anything, let alone something commercial.

So my questions are:

As this has been previously used as commercial premises, would it be liable for business rates regardless?

Is that an assumption made by the local authority, or is it down to whoever is renting it to advise them of the type of use?

And to use for non-commercial, would this require a change of use (request/planning?) before it could be exempted from business rates?

Thanks in advance

Savvy_Sue

It would certainly be liable to business rates until the local authority know different, and while they won't just rely on being told (or not), if you hope to change it then you'd need to contact them.

However, I'd start by looking at this page, which doesn't give any suggestion that you'd be exempt from business rates, and work from there.

Sonofa

Thanks Sue!

If I've read it correctly, I think it would qualify for 100% SBRR (<£6000 rateable value) until next March initially. 50% thereafter I think. I'll have to speak to the council next and see if it is possible to change it to domestic use.

John_Redigo

As long as you occupy no other business property (above £2,500 RV) in your own name (or the same legal entity that rents this site), then with a Rateable Value of less than £6,000 (check your value at voa.gov.uk) you will receive 100% Small Business Rates Relief (SBRR).

Next year the threshold for 100% SBRR is £12,000, which is now written into statute rather than being renewed annually. Although bear in mind that there will be a new Rateable Value as part of the national revaluation process. Unless you are in central London it is unlikely that your new RV will be double the old one (in fact all the figures above assume you are somewhere else in England).

If you change to domestic use you may be liable for some form of council tax liability - but as a business rates consultant my knowledge stops there! With that caveat, my (worth checking) opinion is that as business rates are not "business rates", but are more accurately "Non-Domestic Rates", then as this is a non-domestic property the above applies. Let the Local Authority know who to bill, and once they have raised a rates demand you can apply simply in two minutes for 100% SBRR via a form from the LA or online. It is a mandatory relief and not discretionary so you should have no trouble.

CIS

John_Redigo wrote: »

As long as you occupy no other business property (above £2,500 RV) in your own name (or the same legal entity that rents this site), then with a Rateable Value of less than £6,000 (check your value at voa.gov.uk) you will receive 100% Small Business Rates Relief (SBRR).

Next year the threshold for 100% SBRR is £12,000, which is now written into statute rather than being renewed annually. Although bear in mind that there will be a new Rateable Value as part of the national revaluation process. Unless you are in central London it is unlikely that your new RV will be double the old one (in fact all the figures above assume you are somewhere else in England).

If you change to domestic use you may be liable for some form of council tax liability - but as a business rates consultant my knowledge stops there! With that caveat, my (worth checking) opinion is that as business rates are not "business rates", but are more accurately "Non-Domestic Rates", then as this is a non-domestic property the above applies. Let the Local Authority know who to bill, and once they have raised a rates demand you can apply simply in two minutes for 100% SBRR via a form from the LA or online. It is a mandatory relief and not discretionary so you should have no trouble.

Council Tax would only be due if the property was banded as a dwelling - property used solely for storage is not usually banded for CTax (unless it's been a house and then no-one's reported a change of use).

Craig

Sonofa

Thanks for the additional info gents.

I didn't know that a fixed £12000 threshold was coming in. The current rateable value is only £1750 so it's unlikely that a revaluation is going to be a problem.

This also seems to make my initial question about change of use no longer relevant? If I'm understanding correctly I would just need to make an online application for the 100% SBRR once the rates demand is raised in my name. So no disadvantage leaving it as commercial use.

lincroft1710

It will be up to the Valuation Office Agency to decide if the property should no longer be regarded as Non-Domestic.