The overdue 2017 Rating Revaluation will be based on data collected by the Valuation Office in 2015 and assessed as at 1 April 2015.
For independent schools it is vital, should they receive a VO 6065 (request for cost information) form, that they know how to complete details regarding any changes of use to buildings, including refurbishments and new builds that the Valuation Office might ask for. The form is subject to a 56 day time limit, after which there is a £100 penalty levied for late return.
Independent schools have been in the spotlight recently over their charitable status. Private schools can receive up to 80 per cent relief on business rates for premises used wholly or mainly for charitable purposes.
Questions persist about these kind of charitable breaks. There are other reductions in rateable value written into the Valuation Office’s practices that schools should consider, as well as fulfilling their statutory obligations when completing the return.
“It’s important for schools to be to be very clear about what information they include on the return,“ explains Paul Giness of The Beattie Partnership, “because anything that affects the value of a property right now will have consequences for the rateable value when it’s set in 2017.”
“The Valuation Office categorises school buildings according to their use. The estimated replacement cost (ERC) of these specific categories helps define the values on which business rates are based. For boarding schools this is crucial as any building including domestic accommodation, could have the ERC reduced in proportion to the relevant floor areas,” Paul continues.
An adjusted replacement cost (ARC) may also apply to buildings that are functionally, if not physically, obsolete. So, for example, if a school had a disused building earmarked for refurbishment, there might be scope for a reduction in the rateable value.
Paul explains, “When filling in the building costs, are there any non-standard costs involved, such as an overly expensive demolition cost? These are useful things to include as they’re distinguished from normal building costs.”
There are also separate Valuation Office costings for external school works, such as open-air swimming pools, tennis courts and athletics tracks.
“The devil is in the detail,” concludes Paul. “It is vital for schools supplying information to the Valuation Office that they get the details spot on to ensure their rating revaluation is correct and fair.”
If you are not sure how to complete a Request for Information you might consider taking professional advice.
This Autumn, The Beattie Partnership will be publishing the results of their research in to the anticipated levels of increase for the forthcoming 2017 revaluation. If you require further information, or wish to get a copy please call them on 0161 228 2224.