Revaluation 2010

Brian Jones & Perry Davies

Valuation Office Agency
Business rates – the basics
 Tax paid on business premises and other non-
domestic properties
Nationally pooled, then redistributed between
local authorities in proportion to adult population
Funds contribute directly toward cost of local
authority services
More information
at:http://www.mybusinessrates.gov.uk/wales
Rateable Value – What is it ?
 In basic terms, represents the open
market rental value of the property as at 1
April 2008 as if it were vacant and to let
with the assumption that the tenant pays
for all repairs and insurance.
Information Gathering
Data Teams (Forms of Return relevant to
various classes)
External Sources (local
publications,professional websites and
publications)
What is a Revaluation?
 The object of a revaluation is to ensure this
standard is maintained
Effectively rebasing of property values to keep
them as fair and up to date as possible
1956 – 1963 – 1973 then big gap
Modern five yearly cycle started in 1990 so
this is the fifth modern revaluation
Why Revalue?
Rating is a tax based on the annual value of
property
Market rental values can go up as well as down
Important to keep values relevant to ratepayers
Restores up to date relativities between:
 Property types
Geographical areas
Ultimately, to ensure fairness to all ratepayers
The importance of rates (2005 List)
Non-domestic Rates

• 1.79 million properties

• £51.4 billion rateable value within local and

central rating lists
• Yield c. £22 billion a year
Current rate yield.
The scale of the task in Wales(2010 Draft List)

 23,638 Shops
18,926 Industrials
14,117 Offices
3,837 Holiday Homes
3,593 Pubs
1,316 Caravan Parks/Sites
 621 Hotels ( £ star and above)
Forming part of 103,867 hereditaments valued for
2010 in South and North Wales with a cumulative
RV of £2,354,556,566.
Important Dates for 2010
At a revaluation there are effectively two dates that
are important:

Antecedent Valuation Date [AVD]

1 April 2008
Compilation Date or Material Day
1 April 2010
The Dates
 Local Government Finance Act 1988, schedule 6, para
2(7)
Lists the factors to be taken at material day – broadly
speaking these are all physical
 state of property
state of locality
All other non physical factors are to be taken at AVD –
state of economy
interest rates
fashions
level of values
The Basics Summarised
At a revaluation therefore the following assumptions have to
be made:
1. Rental values are as at the antecedent valuation date – 1
April 2008
2. Physical matters contained in schedule 6, para 2(7) LGFA
1988 are as they are at the compilation day – 1 April 2010
3. All other matters not mentioned in para 2(7) are taken as
at the AVD
4. Therefore, value changes between 1 April 2008 and 1
April 2010 cannot be taken into account but physical
changes can
Not about increasing taxes!
An increase in rateable value does not
necessarily mean an increased rates bill
The national multiplier is the other key factor
used by local authorities to calculate rate bills
Multiplier adjusted so that the total business
rate stays the same, only allowing for inflation
Some rates bills will rise and some will fall
Multiplier for Wales
A provisional multiplier of .409 has been
announced by Welsh Assembly
Government
2009-2010 multiplier is .489
1 April 2008
Date fixed two years in advance to ensure
that information to support the valuation
process is available
Common date ensures fairness and is the
same for all ratepayers
Business rate reliefs and discounts

Small Business Rate Relief.

Additional reliefs for charities, some non-

profit and some rural businesses.
Revaluation 2010 – key dates
 April 2008: common valuation date
29 May 2009: rateable values delivered to clients
(CLG and the Welsh Assembly)
30 Sept 2009: draft lists published online
October 2009: new valuations delivered to most
ratepayers
Early 2010: local authorities issue rate bills using
new valuations
1 April 2010: lists published – new valuations
effective
Revaluation – and now ?
Change of emphasis
The success of revaluation depends on the next
phase
New rateable values have gone live and can be
found on www.voa.gov.uk/2010
All valuations complete and validated to
deadline – 31 May
Enabled analysis and announcement in England of
multiplier and consultation on transition.
Valuation Approaches
 Rental
Receipts & Expenditure
Contractors
Examples of the approach for rating
valuation on classes of interest today.
Licensed Premises (pubs)
Holiday Homes (self catering)
Caravan Parks
Rental
Most common method of valuation
Based on rental evidence
Shops,offices,industrial property
Receipts & Expenditure
 The Receipts Method is likely to be the
preferred method of valuation in those cases
where rental evidence is sparse or non
existent and the rent is likely to be dictated
by the actual or anticipated profit of the
business carried on at the property
 Direct use of receipts –pubs,hotels
Indirect use of receipts – scheme developed
by using receipts – self catering
Contractors/Construction Costs
 Properties are normally never let and by
their nature do not lend themselves to
valuation by comparison with other
classes where rental evidence does exist
and which are not of the type where a
valuation by reference to the accounts of
the undertaking would be appropriate.
Libraries,public conveniences,museums.
Licensed Premises
Wet trade
The premises is placed within one of three
valuation bands for the appropriate
geographic area so as to reflect the nature
of the trading locality,the physical
characteristics of the house and the style
of trade which is maintainable.
Licensed Premises
Dry trade
The property is placed within one of the
two food "valuation bands" (similar to the
approach for the liquor trade)
Licensed Premises
Other
Gaming machines,letting bedrooms,etc
Holiday Homes
Rents – Very few let on an open market
rental basis
Gross Receipts – Largest body of
evidence
Tariffs – A guide and not actual evidence
of income
Holiday Homes
 Evidence from all sources analysed
Value expressed in terms of single bed
unit
Price per bed unit derived from analysis of
all the evidence and will vary depending
upon several factors
Location
Facilities
Quality of accommodation
Caravan Parks
 A scheme of valuation for holiday caravan
parks and sites was agreed for the 1995,
2000 and 2005 lists based upon information
obtained from actual accounts, adapted to
accord with the rating hypothesis. This
approach has been continued for the 2010
revaluation.
A specialist class
Caravan Parks
 Basically “fair maintainable trade” as at the
antecedent valuation date of 1 April 2008
Income Streams
Static Caravans (Single and Twin Units)
Other Holiday Accommodation (e.g. Chalets)
Touring & Tenting Pitches
Other
(Shops,Catering,Bars,Clubs,Amusements,etc)
Concessions
Caravan Parks
Each income stream attracts a
percentage to RV depending on various
factors
Produces the Rateable Value
To Remember
 We value each property from scratch based on a
“basket” of evidence be it rental,receipts or
contractors.
The common valuation date is set down in statute –1
April 2008.
 We may not have had full information upon which to
value particular classes in the area for the Revaluation
in 2005
Many classes of property have been discussed with
industry representatives and in some cases the
scheme agreed.
Summary Valuations
Almost all of the 1.8 million hereditaments
in the list will have published summary
valuations,and a significant proportion will
have valuations to view on the internet.
October 2009 – the new valuations
Breaks down the rateable
value
Indicates what to do – if
anything – by when
 Offers choice of channels
to contact us through
Makes it clear that this is
NOT the bill but directs
them to:
www.businesslink.gov.uk/estim
Summary Valuation Enquiry Handling Centre

The Summary Valuation Enquiry Handling

Centres have been set up in both North and
South Wales.
As at 10th November 2,774 calls received in
South Wales and 1,256 in North Wales.
In the event that the initial enquiry cannot be
dealt with by the Enquiry Centre it is referred
to a specialist team.
Checking the new rateable value
Development of online resource to enable ratepayers
to check and compare their new valuation
 More intuitive navigation
More background information
Online support
More detailed enquiries can be raised electronically
Will be accessed via www.voa.gov.uk/2010
Dedicated 0845 number for those without web access
Draft List onward
Check it. Don’t chuck it.
Local and trade publications
Local radio
Online advertising
Direct mail
Social media
Respond by 30 November
Ensures accurate billing
The online option…
Questions?