Business Rate for residential property

kimshaven

Hello, 

I would like to seek for some helps as I do not know where to get some helps. 

I have been running a small business from home in army barrack for about 2 years (limited company, VAT registered, hired army wives from time to time as part timers to run business) but as business had gone bigger I searched for an office space. From the town where I am staying, there was no decent office space my business could afford with limited numbers only so I decided to go for renting a residential property which was from early this year.  

I then received Council tax letter that included my husband name somehow - so I requested for amendment as my husband is not responsible for the property and he would not be living there and the council sent a new bill with single person occupant discount - (well I did not have clear idea about business rate or council tax either as I have been staying in barrack all years with no direct payment to council). 

And soon COVID 19 hit, and my business faced difficulties with lack of cash-flow and sourcing issue, which made no sale but increased debts. 
I initially contacted bank for emergency loan, but bank never came back to me.
I then talked with my accountant  and he advised that I am eligible to request for small business grant. 
So I talked with council about it and I was told that I should re-apply for business rate to get a grant.    

After 14 days of application I got a response from council that as I am not living in the property, single person occupant discount will have to be removed and they sent a new bill with full amount. I talked with council about business rate application and council said the property will have to be re-evaluated for business rate and they do not know how long it is going to take for now as they do not see any progress about it. 

It does not make a very good sense to me as business rate is not applied yet still council does not consider it as a residential premise so they charge in full. 
With uncertainty about process I do not know if I can still apply for business grant either.  

So far debt is increased so I spent years of personal saving as an emergency to cover the debt and every penny is more valued than ever. 

I would like to know if grant would still be possible after late approval from the council. 
If business rate is not approved anytime sooner, I still do not know if I can raise this issue to council for further helps about council tax - please advise. 

Savvy_Sue

I'm afraid I don't know, but the other thing you should think about is whether you also need to apply for 'change of use' planning permission for these premises. We started using a residential property as offices before getting that permission in place, and it was slightly fraught waiting for it to come through. 

oldbikebloke

Disappointed your accountant has let you get way with this for so long without questioning it themselves.

As a vat registered company you are hardly "small" fry and your "rent" costs should be a dead giveaway for what you are doing wrong - .you are using a residential property as the business premises of a limited company whilst claiming single person discount as though you actually lived there as your main residence whilst married to someone who does not live there - given you live with him in MQ as your main home.

the fact your "accountant" says you are eligible for small business grant is also deeply disturbing since the guidance for that has stated right from the outset that it is only available to entities which pay business rates (or have 100% rates relief) - something your accountant knows all too well that you do not do.

you are certainly not alone in being caught this way. I know of another company who thought they were being clever by paying council tax rather than admitting the change of use of the property to business and thus facing business rates instead..

having now admitted to the council that the property is used for business purposes please do not now try to commit tax fraud by claiming single person discount - you have to be in occupation for that and it has to be in residential use. You will just have to wait for the business rates assessment - that will be done by the Valuation Office Agency (not by your council) and given Covid, goodness knows what their timescales are at present. 

I appreciate English may not be your first language, but have you read any of the guidance yourself?
https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19

Note carefully, business rates grant applies to properties that were subject to business rates on 11 March, yours was not. Therefore, your only chance is if a) the business rate decision is backdated to on or before 11 March 20, and (crucially) b) your council turns a blind eye to the spirit of the guidance as that is pretty clear that, whilst a council has discretion to accept backdated changes, that discretion should be for exceptional circumstances. I would not regard failure to declare your business status as making you "exceptional" 

there is no money for companies paying council tax for use of a residential address - otherwise we would all be claiming it for our companies that operate from "home"

lincroft1710

1. Does your landlord know you are using his residential property as business premises?
2. You will need planning permission for change of use, which will take months and you may not get.
3. The VOA may or may not backdate the rating assessment, you will have to check the Rating Manual on the VOA website about effective dates. It will probably be months before they can re-assess.
4. The council are correct in charging you full CT as the property is not anyone's sole or main residence, so no 25% single person discount can be applied.

Pennywise

oldbikebloke said:

Disappointed your accountant has let you get way with this for so long without questioning it themselves.

The OP said from earlier this year.  The accountant probably didn't even see the book-keeping this soon so may not have even known a property had been rented.