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Backdated Business Rates for Corporate Occupiers

11 November 2016

In February this year, we reported on the Supreme Court ruling in Woolwich v Mazars.

In February this year, we reported on the Supreme Court ruling in Woolwich v Mazars. In summary, the Supreme Court ruled that where a business tenant occupies two or more distinct areas in a building (for example, separate floors) which are accessed through communal areas (e.g. stairs or lifts) rather than through a private inter-connecting staircase or lift, the space occupied by the tenant will no longer be valued as a single entity but as separate properties, with each commanding a separate business rates bill. If the tenant occupies all of the floors in the building and is therefore the only occupier, or if the floors can be accessed through a private access way and could therefore be classified as self-contained, only one assessment will be made for the entire building or floor space.

Increased liability

This change in valuation strategy means that a tenant who fulfils the criteria set out in Woolwich v Mazars, as detailed above, and is accustomed to receiving one bill in respect of its business rates will now receive separate bills for each area it occupies. It may also mean that the tenant’s overall bill for the total area it occupies will be higher.

Backdated liability

The latest news on this change in the valuation process is that it will apply retrospectively. Therefore, whilst you might be up to date with your business rates payments, you might still be in line for a further bill.

It is likely that business rates will be backdated to the most recent of:

(a) 1 April 2015 in England or 1 April 2010 in Wales, and
(b) the date on which you became the occupier of the space.

What to do next?

Nothing. The Valuation Office Agency is currently in the process of revaluing properties and will be in touch if the property you occupy will be affected.

 

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