haverfordwest 12th november 09

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Revaluation 2010Revaluation 2010

Brian Jones & Perry Davies

Valuation Office Agency


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Business rates the basicsBusiness rates the basics

Tax paid on business premises and other non-domestic properties

Nationally pooled, then redistributed between

local authorities in proportion to adult populationFunds contribute directly toward cost of local

authority services

More informationat:http://www.mybusinessrates.gov.uk/wales


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Rateable Value What is it ?Rateable Value What is it ?

In basic terms, represents the openmarket 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.


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Information GatheringInformation Gathering

Data Teams (Forms of Return relevant to

various classes)

External Sources (localpublications,professional websites and

publications)


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Why Revalue?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 areasUltimately, to ensure fairness to all ratepayers


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The importance of rates (2005 List)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 yearCurrent rate yield.


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The scale of the task in Wales(2010 Draft List)The scale of the task in Wales(2010 Draft List)

23,638 Shops18,926 Industrials

14,117 Offices

3,837 Holiday Homes3,593 Pubs

1,316 Caravan Parks/Sites

621 Hotels ( star and above)Forming part of 103,867 hereditaments valued for2010 in South and North Wales with a cumulativeRV of 2,354,556,566.


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Important Dates for 2010Important 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


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The DatesThe Dates

Local Government Finance Act 1988, schedule 6, para2(7)

Lists the factors to be taken at material day broadlyspeaking these are all physical

state of propertystate of locality

All other non physical factors are to be taken at AVD state of economy

interest ratesfashions

level of values


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The Basics SummarisedThe Basics Summarised

At a revaluation therefore the following assumptions have tobe made:

1. Rental values are as at the antecedent valuation date 1April 2008

2. Physical matters contained in schedule 6, para 2(7) LGFA1988 are as they are at the compilation day 1 April 2010

3. All other matters not mentioned in para 2(7) are taken asat the AVD

4. Therefore, value changes between 1 April 2008 and 1

April 2010 cannot be taken into account but physicalchanges can


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Not about increasing taxes!Not about increasing taxes!

An increase in rateable value does notnecessarily mean an increased rates bill

The national multiplier is the other key factor

used by local authorities to calculate rate billsMultiplier adjusted so that the total business

rate stays the same, only allowing for inflation

Some rates bills willrise and some will fall


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Multiplier for WalesMultiplier for Wales

A provisional multiplier of .409 has been

announced by Welsh Assembly

Government

2009-2010 multiplier is .489


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1 April 20081 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


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Business rate reliefs and discountsBusiness rate reliefs and discounts

Small Business Rate Relief.

Additional reliefs for charities, some non-

profit and some rural businesses.


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Revaluation 2010 key datesRevaluation 2010 key dates

April 2008: common valuation date29 May 2009: rateable values delivered to clients

(CLG and the Welsh Assembly)

30 Sept 2009: draft lists published onlineOctober 2009: new valuations delivered to most

ratepayers

Early 2010: local authorities issue rate bills usingnew valuations

1 April 2010: lists published new valuationseffective


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Revaluation and now ?Revaluation and now ?

Change of emphasis

The success of revaluation depends on the next

phase

New rateable values have gone live and can befound on www.voa.gov.uk/2010

All valuations complete and validated to

deadline 31 MayEnabled analysis and announcement in England of

multiplier and consultation on transition.


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Valuation ApproachesValuation Approaches

RentalReceipts & Expenditure

Contractors

Examples of the approach for ratingvaluation on classes of interest today.

Licensed Premises (pubs)

Holiday Homes (self catering)Caravan Parks


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RentalRental

Most common method of valuation

Based on rental evidence

Shops,offices,industrial property


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Receipts & ExpenditureReceipts & Expenditure

The Receipts Method is likely to be thepreferred method of valuation in those caseswhere rental evidence is sparse or non

existent and the rent is likely to be dictatedby the actual or anticipated profit of thebusiness carried on at the property Direct use of receipts pubs,hotelsIndirect use of receipts scheme developed

by using receipts self catering


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Contractors/Construction CostsContractors/Construction Costs

Properties are normally never let and bytheir nature do not lend themselves to

valuation by comparison with other

classes where rental evidence does existand which are not of the type where a

valuation by reference to the accounts of

the undertaking would be appropriate.Libraries,public conveniences,museums.


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Licensed PremisesLicensed 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.


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Dry trade

The property is placed within one of the

two food "valuation bands" (similar to the

approach for the liquor trade)


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Other

Gaming machines,letting bedrooms,etc


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Holiday HomesHoliday 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


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Holiday HomesHoliday Homes

Evidence from all sources analysedValue expressed in terms of single bed

unit

Price per bed unit derived from analysis ofall the evidence and will vary dependingupon several factors

LocationFacilities

Quality of accommodation


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Caravan ParksCaravan Parks

Basically fair maintainable trade as at theantecedent 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


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Caravan ParksCaravan Parks

Each income stream attracts a

percentage to RV depending on various

factors

Produces the Rateable Value


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To RememberTo Remember

We value each property from scratch based on abasket of evidence be it rental,receipts orcontractors.

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 Revaluationin 2005

Many classes of property have been discussed withindustry representatives and in some cases thescheme agreed.


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Summary ValuationsSummary 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.


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October 2009 the new valuationsOctober 2009 the new valuations

Makes it clear that this is

NOT the bill but directsthem to:

www.businesslink.gov.uk/esti

Offers choice of channelsto contact us through

Indicates what to do if

anything by when

Breaks down the rateablevalue
http://www.businesslink.gov.uk/estimatemyrateshttp://www.businesslink.gov.uk/estimatemyrates


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Summary Valuation Enquiry Handling CentreSummary 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 inSouth Wales and 1,256 in North Wales.

In the event that the initial enquiry cannot be

dealt with by the Enquiry Centre it is referredto a specialist team.


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Checking the new rateable valueChecking the new rateable value

Development of online resource to enable ratepayers

to check and compare their new valuation

More intuitive navigationMore 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
http://www.voa.gov.uk/2010http://www.voa.gov.uk/2010


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Draft List onwardDraft List onward

Check it. Dont chuck it.Local and trade publications

Local radio

Online advertisingDirect mail

Social media

Respond by 30 NovemberEnsures accurate billing

The online option


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Questions?

haverfordwest 12th november 09

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