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Legal update - Business rates appeal success

Clubs with premises are likely to be aware of the revaluation of rate values which was published in September 2016 and resulted in substantial increases in rates bills for many clubs.

Frensham Pond SC was one such club hit by a huge increase in its rateable value; its 2010 rateable assessment was £12,000, as a result of the revaluation of rates the Valuation Office Agency (VOA) proposed an increase to £50,000. 

The Club was forced to bring an appeal against its revised ratings bill, which involved a substantial amount of time, but nevertheless its determination paid off.

We are pleased to report that the Club reached an agreement with the VOA, reducing its rateable value from £50,000 to £13,300 with effect from 1st April 2017. This result means that the Club qualifies for Small Business Rate Relief (SBRR). The SBRR threshold is currently RV £15,000.

Mark Radford[1], a Ratings Consultant with extensive experience of acting on behalf of sports clubs, was instructed to act on for the Club. The grounds for appeal centred on ability to pay. 

There are two important points that came out of the appeal:

1) The VOA does not have any rental evidence to substantiate the very large level of assessment currently applied to some sailing clubs. This was something of a test case and if there was any evidence it would have used it.

2) In the absence of any meaningful evidence, the VOA will find it difficult to defend its position against ability to pay arguments.

Unfortunately, the settlement was reached on a without prejudice basis which is likely to mean that the VOA will be reluctant give it due consideration in future cases. Nevertheless clubs should not be put off from appealing rate increases, particularly where ability to pay is a factor. The situation at each club is always different and there may be cases where ability to pay is not a factor. 

The essential message for clubs is that business rates should never be onerous. The rateable value of a club's accommodation should not be set at, or around, the level of the clubs financial surplus from usual activities as that results in an onerous rateable value.

[1] MHC Radford MRICS, IRRV Mark Radford Rating Tel: 07399 471972

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