Business rates, Changes to VED, VAT flat rate scheme

Our latest tax tips considered three tax changes which will come into effect on 1 April 2017. They are: revaluations for business rates, new rates of VED (car tax), and new rules for limited costs traders who use the VAT flat rate scheme. There is still time to plan for all of these changes, and to advise your clients to take action before April, if necessary.

Below we share just part of one of the above 3 tax tips – see the side boxes on this page to learn how you could subscribe to receive the full 3 tax tips every month.

Business rates

Where a property is used for business purposes, the local authority assesses the property for business rates. The amount of tax payable for each property is a combination of its rateable value, and the applicable multiplier for the area where the property is located, less any special reliefs.

Although the tax is paid to the local authority, the multiplier (rate per pound of property value), is determined by national governments. Business rates are a devolved issue, so different multipliers are set in; England, Greater London, Scotland, Wales and Northern Ireland.

The multipliers due to apply from 1 April 2017 have generally been reduced compared to 2016/17. This is to off-set the effect of increases in rateable values from the same date. The revaluation exercise was undertaken in April 2015, and is based on the amount the property could be let for. As the previous revaluation was untaken in 2008, just before the recession, some rateable values will have changed significantly.

In the next few weeks your clients should receive notices of their new business rates for 2017/18. You should first check whether a relief is due, such as for; small premises, essential services in a rural area, agricultural or religious buildings, used by a charity, or used by start-up in an enterprise zone. If a relief hasn’t been given where it is due, the business should contact the local authority which issued the rates bill.

Where the rateable value of the property seems to be wrong, the business can appeal to the Valuation Office Agency, which is a branch of HMRC.