Business Rates
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Basil Fawlty
- Posts: 7
- Joined: Mon Apr 13, 2015 10:30 am
- Location: Southwold
Business Rates
Apologies if this subject has already been discussed, but interested to know if UK owners have had their holiday lets re-classified as business premises in order to benefit from 100% business rates relief. Our property is in Southwold and numerous neighbouring properties have been changed to business, but the rateable values look very low, tending to be in the £2-3000 range and in many instances are being described as only having 1/2 bed spaces, when they clearly must have more. Even so, as long as the RV is less than £6k you get total relief and I appreciate that this will rise to £12k next April. Would welcome any comments.
I'd rather be cycling
From the start we registered for business rates-the rates office couldn't have been more helpful.
Our neighbours changed their let cottage into a holiday rental and he boasted that they had told the rating officer that they would sleep six but in fact they started out sleeping eight. The officer obviously checked online and I believe from that moment they had a great deal of trouble from the rates office.
Our advice- if it is a business, then register as such, be truthful. You do have to have the property available and let for a certain number of nights.
Our neighbours changed their let cottage into a holiday rental and he boasted that they had told the rating officer that they would sleep six but in fact they started out sleeping eight. The officer obviously checked online and I believe from that moment they had a great deal of trouble from the rates office.
Our advice- if it is a business, then register as such, be truthful. You do have to have the property available and let for a certain number of nights.
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Basil Fawlty
- Posts: 7
- Joined: Mon Apr 13, 2015 10:30 am
- Location: Southwold
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Joanna
- Posts: 1091
- Joined: Thu Aug 23, 2007 3:12 pm
- Location: Chester, North West England & Sidmouth, East Devon
- Contact:
There's one rule for tax purposes and a separate one for domestic/business rates. It seems to vary around the country and the only way to be sure what the threshold is for your property is to ask the local council rates department.
At the same time ask them what their policy is with waste collection. Some councils continue to collect waste but apply business charges to it, others stop collecting it and you have to find a commercial waste company to take over. This may seem expensive but still usually works out cheaper than paying domestic rates (as long as you qualify for the rate relief).
At the same time ask them what their policy is with waste collection. Some councils continue to collect waste but apply business charges to it, others stop collecting it and you have to find a commercial waste company to take over. This may seem expensive but still usually works out cheaper than paying domestic rates (as long as you qualify for the rate relief).
Jo
Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
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akwe-xavante
- Posts: 306
- Joined: Wed Jul 01, 2015 3:19 pm
- Location: East Yorkshire
Changing from Domestic to Business rates is nothing to be afraid of and you can change back at a future date.
Not sure but I think that 100% tax relief on up to £6K changes April next to 100% tax relief on up to £6K, reduced to 50% tax relief from £6K up to £12K.
Even so paying 50% Business rates should / could be cheaper than paying domestic rates for those in that bracket.
The only thing for me within the county I live in (Doesn't apply to all councils) is they stop collecting refuse and remove your existing domestic wheelie bins (Unless they can't find them, hint
). "Somebody else must of taken them or the dustbin cart ate them last week"!
You have a choice though, you are not forced to have your refuse taken away as business waste, you can do this yourself free.
To have your refuse taken away for you by the council some people will have to pay for refuse collection, they will give you commercial wheelie bins. The cost of refuse collection over 12 months as a business is greater than the cost of domestic rates. (Was / is for me).
I remove and dispose of refuse myself to the local tip / recycle centre at the end of the day on change over day. Minor hassle and saves £70 a month!!!!!!!!!!!
My local council were very friendly and helpful throughout when I was looking into it.
I had to write requesting a Quote for business rates and give them a little info about the property which was nothing more than the overall dimensions and square meterage of the building and how many bedrooms it had and what it was being used for. Within a few days I had a guesstimate of its business rateable value and I was told I would qualify for 100% tax relief.
I decided to go for it and several weeks later I received an actual rateable value which was a little less than the guesstimate I received earlier. The council stopped taking council tax the next month and a another month later I received an 18 month council tax rebate "Well Pleased and unexpected".
Now the only other unexpected thing that happened a few months later was a guest on holiday at the cottage had to let into the cottage "A council Person!" that's all I got!? who wanted to inspect the property! He popped his head into every room and left. I'm assuming that this person was simply checking my application.
Not sure but I think that 100% tax relief on up to £6K changes April next to 100% tax relief on up to £6K, reduced to 50% tax relief from £6K up to £12K.
Even so paying 50% Business rates should / could be cheaper than paying domestic rates for those in that bracket.
The only thing for me within the county I live in (Doesn't apply to all councils) is they stop collecting refuse and remove your existing domestic wheelie bins (Unless they can't find them, hint
). "Somebody else must of taken them or the dustbin cart ate them last week"!You have a choice though, you are not forced to have your refuse taken away as business waste, you can do this yourself free.
To have your refuse taken away for you by the council some people will have to pay for refuse collection, they will give you commercial wheelie bins. The cost of refuse collection over 12 months as a business is greater than the cost of domestic rates. (Was / is for me).
I remove and dispose of refuse myself to the local tip / recycle centre at the end of the day on change over day. Minor hassle and saves £70 a month!!!!!!!!!!!
My local council were very friendly and helpful throughout when I was looking into it.
I had to write requesting a Quote for business rates and give them a little info about the property which was nothing more than the overall dimensions and square meterage of the building and how many bedrooms it had and what it was being used for. Within a few days I had a guesstimate of its business rateable value and I was told I would qualify for 100% tax relief.
I decided to go for it and several weeks later I received an actual rateable value which was a little less than the guesstimate I received earlier. The council stopped taking council tax the next month and a another month later I received an 18 month council tax rebate "Well Pleased and unexpected".
Now the only other unexpected thing that happened a few months later was a guest on holiday at the cottage had to let into the cottage "A council Person!" that's all I got!? who wanted to inspect the property! He popped his head into every room and left. I'm assuming that this person was simply checking my application.
Hi I am currently looking into changing to business rates.
I have been letting since last February and have just been paying council tax having not really understood the obligations/process/consequences. My flat was normal residential (lived in by us) until we started letting it as a holiday let last year.
How do the council calculate the business rates? Is it based on the income generated by the letting business? Do you have to switch to business rates or can you stay paying council tax?
Many thanks in advance
Kate
I have been letting since last February and have just been paying council tax having not really understood the obligations/process/consequences. My flat was normal residential (lived in by us) until we started letting it as a holiday let last year.
How do the council calculate the business rates? Is it based on the income generated by the letting business? Do you have to switch to business rates or can you stay paying council tax?
Many thanks in advance
Kate
Hi Akwe
You need to be very careful on refuse as it is classified as commercial waste. You should not be taking it to the recycling centre. As a commercial property you can be asked at any time to provide a duty of care waste transfer certificate. You are not allowed to transfer any waste yourself without a license, you can't simply take it away free. The fines for this can be pretty high I understand.
Our council is pretty reasonable on costs, we pay about £40 a qtr for two wheelie bins and a glass box (one is for recycling and one for general waste). This includes providing the duty of care certificate. We get a discount as we qualify for SBRR.
You need to be very careful on refuse as it is classified as commercial waste. You should not be taking it to the recycling centre. As a commercial property you can be asked at any time to provide a duty of care waste transfer certificate. You are not allowed to transfer any waste yourself without a license, you can't simply take it away free. The fines for this can be pretty high I understand.
Our council is pretty reasonable on costs, we pay about £40 a qtr for two wheelie bins and a glass box (one is for recycling and one for general waste). This includes providing the duty of care certificate. We get a discount as we qualify for SBRR.
I recently changed to business rates and obtained a 100% discount. You need to contact The Valuation Office as they determine the level of your business rates. If you are in England, you need to show that you make the property AVAILABLE for a minimum of 140 days per year. (Inland Revenue rule is that you actually let it for 105 days per year to qualify for holiday let tax advantages).
The VO will send you a simple form. Part of their calculations are based on the number of people your property can sleep. You will also need to demonstrate that you have a viable business eg. where you advertise and get your bookings. The VO handle everything - they contact your Local Authority on change of rates and the date of implemention. Mine were backdated to April 2016 so I received a rebate from the local council.
The whole process took less than a month. The VO kept me informed of progress by phone. Excellent service.
The VO will send you a simple form. Part of their calculations are based on the number of people your property can sleep. You will also need to demonstrate that you have a viable business eg. where you advertise and get your bookings. The VO handle everything - they contact your Local Authority on change of rates and the date of implemention. Mine were backdated to April 2016 so I received a rebate from the local council.
The whole process took less than a month. The VO kept me informed of progress by phone. Excellent service.
The best things in life are free
Thank you Giraffe - that does sound tempting!
I will bite the bullet and start applying to change to business rates. As we have a city apartment our year round occupancy is fairly good and the income is higher than 12k a year, so I am just worried that I will end up paying more in business rates if we are not eligible for any relief.
I am not sure how they will take away our wheelie bin - we share multiple bins with 7 other flats, we are the only holiday let as far as I am aware.
I will bite the bullet and start applying to change to business rates. As we have a city apartment our year round occupancy is fairly good and the income is higher than 12k a year, so I am just worried that I will end up paying more in business rates if we are not eligible for any relief.
I am not sure how they will take away our wheelie bin - we share multiple bins with 7 other flats, we are the only holiday let as far as I am aware.
Hi Kate,
Not sure they will take bins away but worth checking what you need to do to cover your commercial waste. This may be more of an issue where we are in the South West as there are so many holiday homes and B&B.
The rateable value doesn't link that closely to your income. Our gross income is probably 5x the rateable value. I think it relates more to the profit you are likely to make after all assumed costs. You can search on the VOA site for similar properties to get an idea. If you just have the one property you are very likely to get a 100% rebate under current rules.
Not sure they will take bins away but worth checking what you need to do to cover your commercial waste. This may be more of an issue where we are in the South West as there are so many holiday homes and B&B.
The rateable value doesn't link that closely to your income. Our gross income is probably 5x the rateable value. I think it relates more to the profit you are likely to make after all assumed costs. You can search on the VOA site for similar properties to get an idea. If you just have the one property you are very likely to get a 100% rebate under current rules.
Hello Kate24. I have a large 4 bedroom holiday let house which sleeps 7. I was under the same misapprehension as you before I looked into business rates. My business rate valuation is £3,100. This does not vary on the amount of business you do. It is based on the property and that you have and it's viability as a holiday let business. There are 2 figures for England you need to be aware of:
1. The Valuation Office. One of their criteria is that you make the property AVAILABLE for rent for a minimum of 140 days per year. This is a "before" figure.
2. The Inland Revenue. To qualify for their holiday let tax status each year you have to prove that you have commercially let the property for 105 days ( with some leeway on adjacent years). This is the "after" figure and has no impact on your business rate calculation.
Hope this makes it a bit clearer for you.
1. The Valuation Office. One of their criteria is that you make the property AVAILABLE for rent for a minimum of 140 days per year. This is a "before" figure.
2. The Inland Revenue. To qualify for their holiday let tax status each year you have to prove that you have commercially let the property for 105 days ( with some leeway on adjacent years). This is the "after" figure and has no impact on your business rate calculation.
Hope this makes it a bit clearer for you.
The best things in life are free
Hello Kate24. I have a large 4 bedroom holiday let house which sleeps 7. I was under the same misapprehension as you before I looked into business rates. My business rate valuation is £3,100. This does not vary on the amount of business you do. It is based on the property and that you have and it's viability as a holiday let business. There are 2 figures for England you need to be aware of:
1. The Valuation Office. One of their criteria is that you make the property AVAILABLE for rent for a minimum of 140 days per year. This is a "before" figure.
2. The Inland Revenue. To qualify for their holiday let tax status each year you have to prove that you have commercially let the property for 105 days ( with some leeway on adjacent years). This is the "after" figure and has no impact on your business rate calculation.
Hope this makes it a bit clearer for you.
1. The Valuation Office. One of their criteria is that you make the property AVAILABLE for rent for a minimum of 140 days per year. This is a "before" figure.
2. The Inland Revenue. To qualify for their holiday let tax status each year you have to prove that you have commercially let the property for 105 days ( with some leeway on adjacent years). This is the "after" figure and has no impact on your business rate calculation.
Hope this makes it a bit clearer for you.
The best things in life are free