VOA Business Rates In The UK- Complete Guide

By  | 

All non-domestic properties in the UK should be evaluated by the VOA (Valuation Office Agency) for tax purposes. And the result of these commercial properties valuations is available online. It mainly consists of floor area surveys of interior space in premises.

Moreover, the Valuation Office Agency also gathers information on the thickness of the wall, types of roofs, occupancy types, and other details relevant to the building modeling. Here is detailed information about VOA business rates in the article named- VOA business rates in the UK- Complete Guide.

What Are VOA Business Rates?

VOA business rates are also often called National non-domestic rates; local taxes on commercial properties. The government sets these taxes, and according to it, the business rates are collected by local authorities. This way, the individuals who occupy commercial properties contribute to the cost of local services.

How does It work?

Two factors contribute to the business rates bill acquired by every ratepayer. The rateable value (RV) of the non-domestic property that the VOA sets in England and the Assessor in Scotland, and the Business Rates Poundage set by the central government.

The sum of rates payable is measured by simply multiplying the RV (Rateable Value) by the Poundage Rate.

Rateable Value (RV)

There has been a legislative requirement on the VOA/Assessor of Scotland to follow a “General Revaluation” every five years. Thus, from 2022, the revaluation will be done every three years.

rateable value

The present business rates revaluation came into effect from 1 April 2007. The Rateable Value calculation is constructively an estimate of the annual rent that the VOA/Assessor thinks the premises would command in the open market.

Depending on Rateable values, several landlords, tenants, and occupiers experienced a sharp rise in their rates, which is against the general downturn in the commercial market in a few years.

The Rateable values are fixed by VOA, which are a part of HM Revenues and Customs. If the situation changes, they can change the value, and you, the business ratepayer, can allure against the value if you believe it is wrong.

The current rateable value represents a professional assessment of the annual rent of a property. The RV for the time starting from 1 April 2023 depends on a similar evaluation as it was on 1 April 2021.

The Valuation Office Agency collects as much evidence as possible about actual rents paid for premises so that they can fix actual property values.

Rates Poundage

The local council, not VOA, is accountable for rates collection and the administration of the various business rates reliefs which are available. Till 2018, the poundage rate was set at £0.466, which increased up to £0.492 for commercial properties with an RV greater than £51,000.

Like, if you have a property with an RV of £100,000, you will pay around £49,200 in business rates over ten months.

For the year 2018/19, the poundage rate is £0.480, going up to £0.506 for non-domestic properties with an RV greater than £51,000 in business rates. Each year on 1 April, the Poundage rate is changed by the government based on the level of inflation.

What Is Revaluation?

The VOA routinely reassesses and updates the rateable values of all commercial properties every five years, and this is called revaluation. It is done to create fairness in the system by redistributing the total owed amount in the business rates, considering the changes in the non-domestic market. However, revaluation does not raise extra revenue.

voa business rates - revaluation

How Can RV Change?

The rateable value of premises can be changed because of numerous reasons-

  • Your property may vary in size because of extension or other alterations.
  • The use of your property may change.
  • You can also plead for re-examination against the assessment after a revaluation.
  • You may aggregate your premises with the next door or divide it into two or more units.

If you think your RV value is too high or want to change the assessment of your premises, you should contact VOA.

Check And Challenge Your RV

If you anticipate that your RV value is not correct, then this is how you can ask VOA to reexamine it. You will not get charged to re-appeal.

The information can be found on Gov.UK’s site and you can check and challenge your rateable value online via GOV.UK. You can contact the VOA anytime.

If VOA agrees with your appeal or if you reach an argument, the RV will be changed, and if in case the agreement cannot be reached, the issue can be passed on to the Valuation Tribunal. Keep in mind that you must have to pay your bill even if you have appealed against the RV.

Debates Around VOA Business Rates

Business rates are very infamous with many segments of the business development community, exceptionally high street shops, and firms with large physical operations. These businesses point to the permanently fixed values, ones not related to revenues, that VOA business rates place on their operations.

For blooming companies, business rates are like a tax on investment. While for those businesses struggling to survive, business rates are regularly considered a cost burden that makes their business viable.

Critics of the business rates have always focused on how fast business rates have been growing in recent years. In 2020, the supermarket chain said that its business rate bill had doubled to £700m in a few years.

The UK’s business rates taxation on the property is said to be the highest among the OECD nations.

Property taxation has contributed to over 1.5% of the UK’s GDP. The rise of e-commerce and online trading has turbo-charged the debate around business rates in a few years. Because of the current scheme, an online business that does not maintain a retail tax location that uses lower-rated premises enjoys a cost base advantage that allows them to cut the number of traditional retailers.

Along with it, the decline in conventional trade is declined due to the practices of home working developed during the pandemic.

There are suggestions that future returns from business rates may decline moving forward. It is important to save your profit and turnover and visit the site  to increase your profit by trading bitcoins.

Ryan Bradman

Ryan Bradman

Guest Blogger & Outreach Expert - Interested in Writing Blogs, Articles in Business Niche | News Journalist By Profession in the United Kingdom
Sharing is caring