Biggest threat to countryside enterprise 'in a generation'

Farm shops, vineyards, livery yards and stud farms, to name but a few, are likely to be worst hit by the Valuation Office Agency revaluation exercise.

Anyone hit by a big increase needs to look carefully into how the increase has arisen and whether the VOA either has its information right, or can justify its figures.

These rates are usually reset every five years, but a delay means that the government is adjusting rates to reflect seven years of changes in the property market. However it is significant that the basis of assessing rates has not changed; namely it is the rental value of the property.

Those concerned should question how much rental values for such facilities increased between 2008 and 2015. The answer is that in many cases in the West Midlands rental values have not increased that much on like-for-like properties, between the two dates.

The last revaluation in 2008 was at the end of the last property boom when rental values were quite high. Since then most property rental values have plateaued, and are only now beginning to catch up with inflation.

So on the face of the figures, increases should be modest.

As part of the revaluation of business rates, the government has doubled the threshold at which rates are payable from £6,000 to £12,000 with a sliding scale of relief up to £18,000 which takes many small businesses out of rates.

As a result the VOA is under more pressure to find additional revenue sources, hence having a closer look at soft target rural business properties. The problem is most of the VOA officers are more used to dealing with urban properties, with rural specialists thin on the ground.

The revaluation will have been a desktop exercise based on the limited information the VOA has from the rates returns.

Office blocks and shops are relatively easy to value; equestrian yards and other rural businesses are much harder due to their complex nature.

The scope for an incorrect valuation is high, often because they are based on the wrong information.

In March businesses will be receiving business rates invoices for 2017/18. If you consider your rateable value to be incorrect and unjustifiable then do seek professional advice.

* Michael Watney, an associate partner with Balfours, specialises in rural business rates.