Rent and business rates and VAT claims

lincroft1710

The rateable value of a property is supposed to represent its rental value as at 1 April 2021, So if your rent is £50,000 pa your RV should be around £50,000 rather than £10,000, which would mean a rates bill for 2024/25 of around £25,000. You should check out the details of the property here

https://www.gov.uk/find-business-rates

If the details are correct, then you should be looking for a a sizeable rent reduction 

Bartoni79

lincroft1710 said:

The rateable value of a property is supposed to represent its rental value as at 1 April 2021, So if your rent is £50,000 pa your RV should be around £50,000 rather than £10,000, which would mean a rates bill for 2024/25 of around £25,000. You should check out the details of the property here

https://www.gov.uk/find-business-rates

If the details are correct, then you should be looking for a a sizeable rent reduction 

Thanks for this. How do small business rates relief work? Is it possible to pay no business rates or are they only discounted? Cheers 

daveyjp

Any rate relief will be given at source, so the rates bill will be adjusted by the collecting authority based on RV and any reliefs applicable.

Rental values can be in excess of RV (they can also be lower)  which is why revaluations are carried out every 5 years.

lincroft1710

daveyjp said:

Rental values can be in excess of RV (they can also be lower)  which is why revaluations are carried out every 5 years.

Rental values are most unlikely to be 5 times the RV especially since there was a revaluation last year.


I'm ex VOA and I remember a ratepayer moaning about his storage land being given a RV of £30 at the 1973 reval. It was wrong, it should have been £300!

Bookworm105

Bartoni79 said:

Thanks for this. How do small business rates relief work? Is it possible to pay no business rates or are they only discounted? Cheers 

business rate relief varies depending on "type"/size of business, but yes if below a certain threshold you would pay zero business rates. 
Business rates relief: Types of business rates relief - GOV.UK

for example if you meet the definition of "small business" then how much relief you get varies with rateable value:
up to £12k RV = pay 0
between 12 - 15k = the discount is variable until it is none at 15k
>15k pay full rates
Business rates relief: Small business rate relief - GOV.UK

further info easily available by reading all of these pages:
Business rates: Overview - GOV.UK

penners324

MattMattMattUK said:

Bartoni79 said:

I’m thinking of starting a business as a ltd company.

If I rent of a premises at 50k ex vat,

There is no VAT on rent, so it is always ex. (Though there can be a slight oddity with serviced offices, not not applicable here as you talk about rates).

Bartoni79 said:

rateable value is 10k with 49.9p UBR in the £, and I make 100k in revenue what do I pay annually?

Is it £50k+£10k VAT plus £10Kx49.9% = £64999

Income £100,000 (however you would need to register for VAT, so you would need how you account for that in your pricing)
Less costs of:
Rates: £4,990 (although you will have costs greater than that, other bills, expenses, cost of product, service etc.)

Net profit £45,010
Tax: £8,551.90 (Small profits rate 19%)
Distributable funds £36,458.10, which you could then distribute as dividend and would personally pay dividend tax on.

Bartoni79 said:

Can I claim the 10k VAT back? / VAT back on all purchases made?

There is no £10,000 VAT. You can claim VAT back on some purchases, not all. Any purchases are also going to eat into the profit figure as you have not accounted for anything other than rent and rates as costs. 

There can be VAT on rent for commercial premises.

It's upto the property owner and a lot depends on whether VAT was reclaimed on purchasing the property