Sustainable Energy Business Rates

business rates

We are receiving more requests to assess the accuracy of business rates. We have built up comparable evidence which enables us to challenge the VOA on your behalf.

Background

Renewable installations which operate as a commercial venture are currently liable to pay business rates, unless they are smaller than 50kW, part of an agricultural building (with the majority of the electricity consumed on-site) or classed as a small business or charity.

Annual rates bills are calculated by multiplying the Rateable Value (RV) by the multiplier (set annually by Central Government).  The standard multiplier in England currently stands at 49.7p/£ (effective from 01 April 2016) with a reduced multiplier of 48.4p/£ for small businesses with an RV below £18,000.  Current RVs and multipliers are applicable until April 2017, when a new rating list will come into force.

2017 Revaluation  

The Valuation Office Agency (VOA) has now published its draft RVs which will take effect from 1 April 2017 until 2022. The way in which the VOA value renewable energy projects is changing, to reflect how the capital costs and subsidies have altered since the last valuation date (2008). Solar installation costs, for example, have fallen around 80% since 2008 and the subsidy landscape has undergone enormous change during this period with the introduction of Feed-in Tariffs (FITs) in 2010 and the Renewable Heat Incentive (RHI) in 2011.

A new 2015 valuation date has been used to analyse the income stream provided by subsidies, and the value of electricity and the capital costs of setting up a scheme have also been taken into consideration.

Renewable energy installations are being hit with significant increases in RV from April 2017, particularly commercial rooftop PV projects, with increases of up to six to eight times current levels.  RVs for onshore wind turbines are also increasing, in some cases tripling existing business rates, with projects built before 2012 seeing the highest increases.

If you think that your draft 2017 business rates have been incorrectly or unfairly calculated, we can raise a query with the VOA to check the methodology used and if applicable, challenge them.  It is important to contact the VOA before the rates come into effect in April 2017, otherwise a formal appeal process is required which could be costly and time consuming.   

Small Business Rates Relief (SBRR)

Properties which have an RV of £12,000 or less can potentially qualify for SBRR. It is currently possible to receive 100% relief (doubled from the usual rate of 50%) until 31 March 2017 for properties with an RV of £6,000 or less. A property which qualifies is effectively exempt from paying business rates. The rate of relief will gradually decrease from 100% to 0% for properties with an RV between £6,001 and £12,000.

In the recent Budget, former Chancellor George Osborne outlined that entities with an RV of £12,000 or below will permanently benefit from 100% relief from business rates from April 2017, doubling the ceiling from £6,000. In addition tapered relief will be available for properties with an RV of between £12,001 and £15,000.

If you think that you may be eligible for SBRR, we can assess the likelihood of success and carry out an application on your behalf to the Local Authority. SBRR can potentially be backdated and refunded to the installation date.  Please get in contact for further details. 


key contacts

key contacts

Contact one of our renewable energy team for further information on renewable business rates.

01858 411236

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Darren Edwards

 
Darren Edwards
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