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Overvalued City companies need to find ways to reduce the payment of sometimes excessive business rates. Alex Stevens explains how occupiers have saved large sums by rebasing their liabilities
What type of loopholes can be found?
In the City of London, values have varied hugely over the first three rating lists of the new rating era. We value two years before each rating list comes into force and valuation dates have been 1988, 1993 and 1998. In 1988, in the City, the highest office rents were nearing their peak at £56 per sq ft (£600 per m^sup 2^); in 1993 they had fallen to £18.50 per sq ft (£200 per m^sup 2^) and by 1998 increased to £37 per sq ft (£400 per m^sup 2^). Much of the office stock fell to 20% of its 1990 list value for the 1995 list and then increased 250% for the 2000 list.
That meant that the transition downwards in the 1995 list lasted all five years of the rating list, and so rateable value reductions resulted in few rates payable savings.
Loopholes needed to be found to mitigate excessive rate bills. I earned my largest fee in the 1995 list by doubling a rateable value and nearly halving the liability. The interaction of transition and the limitation on the valuation officer to backdate enabled me to do this. It prevented the ratepayer from paying ten times the rateable value (RV) multiplied by the uniform business rate (UBR) between 1995 and 2000. This was exceptional, but many paid three times RV multiplied by UBR. When their rateable value more than doubled in 2000, they still did not benefit from transition upwards, as even by 1999/2000 transition downwards left them paying £1 in the £1, not 48.9p (the UBR).
In the 2000 list, many occupiers have saved substantial sums by rebasing their liability from between 50p and £1.20 in the £1 to 48.9p. The rebasing enables the ratepayer to benefit from...