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New Business Rates Ruling

Sep 3rd, 2015

A case, heard at the Supreme Court in July 2015, may affect your current business rates you are paying or are likely to pay in the future.

The Court ruled that where a business occupies various non-adjoining units within the same building or estate, the units may be treated as separate, and therefore both charged independently, for business rates. This may amount to an increase in your business rates becoming payable for your premises

The test to determine if you are affected by these changes has three elements as follows: 

  1.  whether or not the units are linked geographically and cannot be accessed without using common parts within the building or the estate;
  2.  whether or not the use of one floor is necessary to the effectual enjoyment of the other. An indication of this is if the units can be leased separately to different businesses; and
  3.   whether the objective character of the property, on a factual basis determined by the valuer, would indicate if the units were to be treated separately.

Ultimately what this means is that, unless your business can directly intercommunicate between its units within the building or estate, without using common staircases or lifts, or if you were unable to show that your offices could be separated out and leased to different businesses, your units within the same building or estate would be chargeable separately for business rates purposes.

This is intended to provide general information only.  It is not intended to be comprehensive or provide specific legal or tax advice and should therefore not be acted or relied upon. If specific tax advice is required we would be happy to recommend a tax specialist.

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