Global Edition

 

Reducing Annual Business Rates Charges

1.39am 26th July 2012 - Management Topics

Mark Smith

In January this year a two-day Valuation Tribunal hearing took place regarding the Rateable Values placed on four English West Country golf clubs. The Valuation Tribunal’s decision was recently published and the good news is that the two chartered surveyors acting for the various golf clubs got a big win, which could help other clubs significantly reduce their rates bills on appeal.

The four golf clubs were Saunton, Burnham & Berrow, Taunton & Pickeridge and Enmore Park. The appeals related to the Rateable Values put on the four courses for the statutory 2010 Rating List. The level of Rateable Value is the main determinant for what golf clubs pay in annual rates for the five-year period 1st April 2010 to 31st March 2015.

The Valuation Office (‘the VO’), an executive agency of HM Revenue & Customs, has the responsibility for setting Rateable Values on golf venues in England and Wales. In simple terms the Rateable Value is meant to represent the hypothetical annual rental value of all components of a club: land, golf holes, clubhouse and greenkeeping complex as at 1st April 2008.

The Valuation Tribunal’s decision was as follows:

2005

Rateable Value

2010 Rateable Value

Set by VO

Valuation Tribunal 2010 RV Decision

Saunton

£91,250

£167,000

£129,000

Burnham &Berrow

£80,000

£144,000

£95,000

Taunton & Pickeridge

£63,250

£81,000

£66,000

Enmore Park

£52,000

£68,000

£57,000

Considerable effort went into preparing the cases for the hearing from both the Valuation Office and the appellants’ professional advisers, Mark Smith and Hugh Wilkinson, and the hearing was at risk of needing to go into a third day of debate.

The Valuation Tribunal had many issues to consider: changes in golf market conditions over the last few years; the extent of true open market rental evidence; the effect of upwards only rent reviews and do they distort the comparable evidence; are / should golf rental values be falling; what are the trends in golf club financial trading performance; is Community Amateur Sports Club status (CASC) distorting the rental market; was the golf industry already struggling before the worldwide banking crisis of autumn 2008 and the subsequent recession, plus a few others.

If you wish to read the Valuation Tribunal’s reasoned decision then go to their website at www.valuationtribunal.gov.uk, press the ‘Listings & Decisions’ tab, click on ‘Decisions’ for non-domestic appeals, press the ‘More Options’ button and type in one of the club’s names above.

The Valuation Tribunal’s decision determined the Rateable Values at figures much closer to, or indeed the actual ones requested by the appellants’ professional advisers, as opposed to those proposed by the Valuation Office.

Mark Smith commented: “Hugh Wilkinson and I both know how tough trading conditions are for many golf clubs and it was great to get this result. Whilst every appeal should in theory be considered on its merits, this decision has important implications. For those clubs who don’t benefit from 80% rates relief via CASC or where transitional relief is minimal, every £15,000 reduction in Rateable Value typically saves around £35,000 in rates liability over a five-year period.

Hugh Wilkinson and I have many years of specialist experience in UK golf property matters, and the Valuation Tribunal result showed that this knowledge paid dividends for our clients. Furthermore, being involved in letting golf courses on the open market I am convinced that for many golf venues, rental values should be falling.”

Tactics and timing of rates appeals are important considerations. If you have not yet appealed your club’s Rateable Value and would like to do so then you can contact either Mark Smith or Hugh Wilkinson as follows:

Mark Smith BA MRICS MBA: mark@smithleisure.com / 01985 214147 / 07951 587303.

Hugh Wilkinson BSc (Estate Management) MRICS: hugh.wilkinson@btinternet.com / 01242 524890 / 07989 125835.

       

You can see the latest news letter here.

Follow us on Twitter and LinkedIn.            

Use the buttons above to control the search results you want.

Prefixing a search term with a hyphen will exclude results matching that term.
For example 'green -greenkeeper' will return results containing 'green' but not 'greenkeeper'.