Business Rates & Reviews

Farm Diversification, 2010 Evaluation of Business Rates

Many farmers and rural businesses may be receiving their 2010 re-valuation assessment, the effective date of valuation being April 2008.

Many may have received with their assessment a form to complete either a VOA 6030 or 6036. These forms are very much different in their request for information and in the first instance you should examine whether the description of the heriditament is correct in relation to your particular enterprise. It does have an important bearing as to which form is completed and how it is completed.

In the majority of cases farm diversification projects are seen as a “business premises” and you are almost certainly liable to pay business rates. Business rates are based on the rateable value of the property which reflects the rental value. If your project is part or ancillary to the main farming holding, then it is important to distinguish parts of the farm that have “agricultural exemption” from that of the diversification project.

The Valuation Agency (VOA) of the Inland Revenue assesses the rateable value of your farm diversification project “business premises”. Living accommodation is generally treated as domestic property and is subject to the council tax charge instead. If the “business premises” and “living accommodation” are in the same property and occupied by the same person then this property is known, as a “composite” and, special rules will apply. The general principle is that business rates are payable on the business premises and council tax on the living accommodation.

The rateable value of the diversification scheme is broadly it open market rental value assuming the tenant insures the premises and carries out all the repairs. There is a fixed date at which the rental value is assessed which is usually 2 years before each rating list comes into force. The current re-valuation is effective from 1st April 2010. It follows therefore that rental values are taken at market conditions prevailing at 1st April 2008. Although the rating valuation is based on the rental value as at this date the physical state of the property and its locality is considered as at 1st April 2010 or at the rate of any subsequent alterations.

Do I have the right of Appeal – Yes you can appeal against the rateable value shown for your property in the 2005 rating list at anytime before the next re-valuation as at 1st April 2010. .

You may appeal against your rateable value:

If you consider the rateable values to high
There has been a change in the use of the property
There has been a change in the locality which has effected the value of the premises
Part of the property has been demolished or added to
There has been a change between domestic and non-domestic use
There has been a merger or split of the property.

A number of the reasons given above are classified as a “material change in circumstances”.

Most business rates appeals are settled by agreement but if this is not possible they are referred to the local Valuation Tribunal and if the rateable value is reduced, you should qualify for a rates re-fund. This will either be sent direct to you as the ratepayer or it will be credited to the next rate demand: or the existing monthly instalments will be reduced. Some billing council billing authorities require written authorisation from the ratepayer before they make the refund.

For further information please contact:
Davies & Co, Kettering, Northamptonshire, NN16 0BU
Tel: 01536 524808
Fax: 01526 415095


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