Chartered surveyor and specialist golf property adviser, Mark Smith of Smith Leisure, explains the process.
Business rates are the government’s commercial equivalent of Council Tax. They are a big overhead for golf operators. After payroll, they might be your largest overhead and bigger than your Corporation Tax bill.
A national business rates revaluation is fast approaching. Golf operators need to think about minimising their new bill.
Your rates bill has two main components: your venue’s Rateable Value times the multiplier. You can’t influence the multiplier – the government sets this each year, but you can do something about your future Rateable Value.
Your Rateable Value is meant to represent your venue’s yearly rental value assuming good physical repair at a set date (1st April 2015 for the revaluation). UK golf operators have faced challenging times since the autumn 2008 global financial crisis. In January I spoke at the GolfBIC conference in Harrogate about the effects on the golf property rental market and the forthcoming rates revaluation.
Your new draft Rateable Value gets published online in October with new rates bills starting on 1st April 2017. You can challenge the new assessment. The government has, however, introduced a major change to the current appeal process which has operated for 25 years.
The new system is called ‘check, challenge, appeal’. The government’s aim with it is to weed out ratepayers’ speculative proposals, leaving only genuine cases going forward.
Fundamentally, the main thrust of the changes is having to state all your key evidence upfront when you first challenge. Critically, the new rules suggest limited scope to introduce further key evidence later on to advance your case. Thus, if you are not really thorough upfront when challenging your Rateable Value, you severely diminish your chances of success later on.
An early criticism of the new system is that when the Valuation Office publishes your new Rateable Value, they won’t provide their supporting evidence in reaching their conclusions. They won’t make available the data of rents paid at relevant golf venues in the UK.
If you don’t have this information, then how can you be expected to make a strong case at the outset?
After the new draft Rateable Values are published this October, I will be taking a close look at my clients’ new golf venue assessments across the country and comparing them with the key golf property rental evidence. If you would like me to have a look at your venue’s new Rateable Value and give you my view on whether it is too high, then just send me a short email in the near future or give me a call (details below). I will add you to my list of venues to look at. I will do this research for you without charge or obligation on your part.
It will be interesting to see how accurately the Valuation Office has evaluated changes in the golf sector and what the opportunities are for golf venues to reduce their business rates bills from April 2017 onwards.
Certainly, in previous rates revaluation exercises there have been some good savings to be made. Tax savings of £30,000 to £60,000 over the life of the various Rating Lists on golf venues were commonplace. In some cases, the savings were much higher. I had a number of cases for clients where the savings were well over £100,000 and for one client the saving was just short of £½ million.
Similar results may be possible for venues with the forthcoming April 2017 revaluation, but considerably more time and effort upfront will be needed to get such results.
For more information on the subject or if you would like me to add your venue to the list of Rateable Values to research after the new figures are published, then you can contact me on 01985 214147 or at firstname.lastname@example.org