Changes to how we value some non-domestic properties with more than one occupier
Find out how you could be affected.
A Supreme Court decision about how the VOA values non-domestic buildings which are occupied by more than one person or a business could mean a change in business rates for some ratepayers.
The decision in the Supreme Court case ‘Mazars vs Woolway’ means that we have had to revise how we value properties where occupiers use two or more separated spaces within the building. We are now legally obliged to treat different areas of the same building (which are accessed through communal areas) as separate premises for business rates purposes. We had previously valued separate but adjoining areas (occupied by one individual or company) as a single property.
For example, in a multi-storey office building with different occupiers, where two consecutive floors are occupied by the same person or company, these would have been considered as one “property” for business rates purposes. Following the Supreme Court’s decision, these must now be considered as two separate “properties”.
What this change will mean for ratepayers
If you are affected by this issue, you may be issued separate bills for different parts of your property and your overall rates bill could increase. This change may affect the business rates you have already paid, as any changes your business rates are likely to be backdated to whichever is the most recent:
- 1 April 2015 in England or 1 April 2010 in Wales
- The date you became the occupier
If we believe that your property may be affected, we will contact you and advise you on what will happen next. Unless you hear from us, you don’t need to do anything. Until we review each property, we will not be able to let you know whether your property is affected, or how much your rates bill could change.
To help make this clearer, these are some examples of how non-domestic buildings could be assessed in light of this decision. They don’t cover every possible scenario, but aim to help you understand how the decision may affect you.
- Company A occupies all seven floors of an office building. Every floor has a separate lease, but company A is the sole occupier. All floors are accessed by communal areas, such as lifts, stairwells and hallways. Company A will have one assessment for the entire building, because it is the only occupier of the whole building.
- Companies B and C share occupancy of an eight floor office building. Company B occupies the ground floor to 3rd floor, and Company C occupies the 4th floor to 7th floor. All floors are accessed by communal areas, such as lifts, stairwells and hallways. Companies B and C will have separate assessments for each floor they occupy; one assessment for each floor.
- Companies D, E, F and G occupy one floor each of a four floor office building. The floors are accessed by communal areas, such as lifts, stairwells and hallways. Companies D, E, F and G will have one assessment for each floor they occupy; one assessment for each floor.
- Company H owns a five floor office block. It occupies four floors of the building, and rents one floor out. All floors are accessed by communal areas, such as lifts, stairwells and hallways. Company H (and the other occupier, where relevant) will have separate assessments for each floor; one assessment for each floor.
- Companies J, K and L share occupancy of a seven floor office building. Company J occupies the ground floor to 2nd floor, company K occupies the 3rd floor to 5th floor, and company L occupies the 6th and 7th floors. All floors are accessed by communal areas, such as lifts, stairwells and hallways. However, company K has private staircases between floors 3, 4 and 5. Company J will have three assessments (one for each floor). Company L will have two assessments (one for each floor), and company K will have one assessment, as floors 3, 4 and 5 are self-contained.
- Company M occupies two adjacent industrial units. There is no access between the two units, except by exiting from one building into a communal yard and then entering the other. Company M will have two assessments, one for each unit.
Published: 8 August 2016
From: Valuation Office Agency