Business Rates Retail

Business Rates

Business Rates Retail

Clients

DWD work for a wide range of local, national and international retailers of all sizes and sectors helping them to manage and reduce their business rates liability.

We have an expertise in luxury retail property that is second to none, acting for the LVMH, Kering and Swatch Groups along with a host of premium retailers such as Abercrombie, Tom Ford, Mulberry, Versace, William & Son and Oscar de la Renta.

We operate across the country for multiple occupiers such as Mountain Warehouse, Aldo, Seasalt, Trespass, Molton Brown, Swatch, Mango, Uniqlo, Yours Clothing and Zara and locally for smaller ratepayers such as Wigmore Sports, Fiona Barrett Interiors and Ocean Leisure.

Tax Structure

Two separate parts of government administer business rates.  The Valuation Office (VOA), part of HMRC, are responsible for identifying and valuing units of rateable property.  The tax is payable at roughly 50% of their opinion of the rental value of your property.  Local Authorities are responsible for identifying the ratepayers, applying the correct charging rules, issuing rate demands and collecting the tax.

Our tax mitigation work falls into two distinct parts:  Challenging the assessments created by the VOA and managing the charging process.

Business rates are a tax on the occupation of property; exemptions are available where property is not occupied.

To keep the tax base up to date all non-domestic properties across the UK are revalued periodically.  The latest general revaluation in Great Britain was effective from 1 April 2017, the next one will have effect from 1 April 2021.  The revaluation brings new challenges especially with regards to an aggressive transitional relief scheme and an entirely new business rates appeal process.

Sector Issues

Opportunities to mitigate business rate liabilities arise throughout the property lifecycle.

Prior to store opening there will be opportunities to exploit empty property exemptions.  Where construction activity is involved in preparing a new store configuration it may be possible to remove the empty rate liability completely for many months or even years.

During the store’s lifetime there will potentially be refitting, reconfiguration or relocation projects.  Each of these events provides an opportunity to reduce the business rates overhead.

At the end of the store’s life the empty property rate liability will need to be carefully managed.  Different strategies will need to be adopted dependent on the circumstances and whether the property will be held empty for a short or long term.

Appeals

For the 2017 Revaluation the government has introduced a new appeal system known as Check Challenge Appeal (CCA).  This has made the appeal process slower and more complex.  However, the underlying principles and opportunities presented by the rating system remain unchanged.

Retailers will face issues relating to excessive valuations and changing circumstances that need to be managed.  Scaffolding or other disturbance can adversely affect value and be used to reduce assessments.  Similarly, the opening of a new retail scheme can impact on existing locations.

Different appeal types can be used to achieve different objectives: Correcting factual Issues, challenging opinions of value or adjusting values to reflect changing circumstances.  In some cases assessments can be reduced to £0 where significant and structural changes are being made to prepare shops for occupation.

At the basic level the facts, levels of value and methodology of each valuation need to be tested.  An appropriate appeal strategy will be developed to suit the circumstances of each individual property and client.

Exemptions & Relief

During empty or part occupied periods exemptions may be available to mitigate your business rates liability.  Property occupied by contractors will often be regarded as empty for rating purposes.

For retail property this will occur at the beginning and end of the occupation.  Where closed stores go dark for an extended period prior to relinquishing the lease more imaginative solutions may be available to mitigate the rate liability.

Exemptions may also be available during refits or reconfiguration work midway through the occupation.  Where phased work is planned discretionary relief may be available in stages for the parts of an assessment that are empty during the scheme.

Business Support

Part of our mission at DWD is to take the hassle of business rates off your desk.

We will provide annual budget forecasts for your entire portfolio.  We’ll also provide budget liabilities for proposed stores that you may be considering taking.

We will check and authorise rate demands.  For some of our clients we act as the postal address for receiving demands and will only forward correct or corrected demands on to our clients’ accounts payable team that are correct for payment.

We offer advice on BID Levy issues as well as Business Rate Audit issues.  Every year we complete hundreds of Valuation Officer requests for rental information on our clients’ behalf.  This ensures accuracy and the appropriateness of the information supplied.