Beware rates hike after change of use

By Simon Wragg

FARMERS looking to change the use of a building as part of a diversification plan are urged to check its likely rateable value before beginning work.

Otherwise, they could face back-dated rates bills which can mount up to thousands of Pounds.

Officials at the Valuation Office Agency – the government department responsible for establishing rateable values – say too many buildings are being converted before such checks are made.

Under the Local Government Finance Act (1988) only farmland and associated buildings are exempt from rates.

Once a barn is no longer used for farm purposes then a rateable value has to be assessed, says the VOAs Ayesha Owusu-Barnaby.

“We tend to become aware of changes in use via other ratepayers whose business may have been affected by the diversification,” she says. Typical examples include the provision of horse livery or the storage of caravans or other property.

Typically, horse livery can be valued at 100-150 a stable and storage at 10/m2 a year. Local authorities use these figures calculated by the VOA to assess rates.

Demands for back-dated rates can be avoided easily, she adds.

“If in doubt, check with the local VOA to see if a rateable valuation needs to be undertaken. If it is, the law in England and Wales requires the agency to review the valuation every five years.”

Lists of rateable values are available through VOA offices, or on the Internet.

Appeals can be made against rates and can be heard by an independent tribunal if not settled amicably between the business and the acting authority, advises Mrs Owusu-Barnaby.

See more