Business Rates – Urgent action needed

Those of you who read the August AIM Bulletin may have seen the article on Business Rates. AIM is working hard to reduce the burden of business rates for our members by working with Colin Hunter of Lambert Smith Hampton, speaking with the Valuation Office and liaising with our partners such as Arts Council England.

The majority of museums haven’t challenged their rating assessment and the Valuation Office uses this as evidence that most museums are happy with the levels of value that they have applied.

After 1st April 2015 the rules on appeals have changed so that general appeals can no longer be back-dated any earlier than 1st April 2015, with the loss to the ratepayers of a potential of five years savings.

But there is a loop hole.

Any appeal based on a Valuation Tribunal Decision made before 1st April 2015 can still be back-dated as long as the appeal is made within 6 months of the date of the decision. Appeals must be made before 25th September 2015 or the right to back date the appeals will be lost.

AIM would like to hear from museums about their experience, issues or concerns with regards to business rates as we are trying to build up a fuller picture of the situation and to gather evidence to support the case for reducing museums’ rateable value. Please email: sassy@aim-museums.co.uk

Yorkshire Museum and St Mary's Abbey Ruins

Yorkshire Museum and St Mary’s Abbey Ruins: the subject of a business rates appeal

Further Information about Business Rates and how they might affect you

Colin Hunter is a Director of Lambert Smith Hampton and has been working with  AIM and some of our members for the last 10 years. He acted for City of Bradford and York Museums and Gallery Trust (YMT) in an appeal hearing earlier this year that produced average reductions in Rateable Values of 30% for 7 museums and galleries in Bradford and York, and he is acting as Expert in advising YMT on further appeals against the decision of the Valuation Tribunal England which is thought not to have gone far enough in reducing the rates liability for their properties.

The Valuation Office is an executive agency of HMRC and has the job of setting the Rateable Values for all properties in England and Wales. They are currently defending the use of contractor’s method of valuation which uses the building costs to recreate the existing museum and produces much higher levels of value than most museums could ever afford to pay in rent, even though the definition of Rateable Value is the rent that could reasonably be expected.

The reductions achieved in the decision of the Valuation Tribunal earlier this year have saved City of Bradford and YMT hundreds of thousands of pounds over a 7 year period because they were back-dated to 1st April 2010. The properties range across a wide spectrum from: the purpose built Yorkshire Museum in the grounds of the ruins of St Mary Abbey York; the Castle Museum in York which is converted from 2 purpose built 18th century prison buildings; to Bradford Industrial Museum which is a former textile mill.

Prior to the hearing, an agreement was reached to settle an appeal on Bolling Hall. In that case the Valuation Office abandoned the contractor’s method and the Rateable Value was agreed at £5,000 down from £25,750, an 80% reduction.

If your building is a Listed building, or had a different prior use, like the Bradford Industrial Museum, then based on this decision there is a good chance that your Rateable Value could be reduced.

After 1st April 2015 the rules on appeals have changed so that general appeals can no longer be back-dated any earlier than 1st April 2015, with the loss to the ratepayers of a potential of 5 years savings.  But there is a loop hole. Any appeal based on a Valuation Tribunal Decision made before 1st April 2015 can still be back-dated as long as the appeal is made within 6 months of the date of the decision. The decision for the Bradford and York appeals was made on 25th March and so appeals must be made before 25th September 2015 or the right to back date the appeals will be lost.

The 2010 Rating List against which the appeals need to be made will be in force until 31st March 2017 so any appeals made now have the potential to make savings for up to 7 years as long as the appeal is made on the right grounds prior to the 25th September.

Colin Hunter has however also given some words of caution.

Before making an appeal you need to take advice from a qualified surveyor who understands rating valuation and has experience at the very least in dealing with historic properties, and leisure properties but preferably with museums and charitable occupiers. There are a lot of firms out there making claims to be rating specialists, who work through hard selling techniques and charge exorbitant fees, but have little or no qualifications and experience (other than marketing).

Colin has offered to give any AIM member who contacts him 15 minutes consultation, at no fee with no strings attached.

To take up this offer, please contact:

Colin Hunter MRICS IRRV (Hons)

Divisional Director

T: 0113 245 8454

E: chunter@lsh.co.uk

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