Introduction to VOA Business Rates
VOA business rates or the Valuation Office Agency is a body in the United Kingdom which helps the government in the valuations and property advice needed to support taxation and benefits. Valuation Office Agency is an executive agency sponsored by the UK Revenue and Customs Administration and endorsed by a public agency.
This body is run in England, Wales, and Scotland. Apart from the govt. It also provides valuation and property advice to the local authorities in the mentioned provinces. VOA is the operating agency of HM Revenue & Customs and employs over 3,600 people.
VOA’s work includes the following key areas
- VOA are compiling and maintaining council tax bracket lists for 26 million domestic real estates.
- VOA collect and maintain a detailed list of 2 assessed values and 1 million commercial properties for sales.
- Advise ministers on valuation, property issues, and employee benefits.
- Provide independent and objective valuation and real estate advice to professionals in the public sector.
We know that the business rates currently raise £23.9 billion in England, which acts as an essential funding source for the local services.
These business rates are an annual tax on non-domestic properties. So, how these business rates of a property are determined? There is a term knows as the ‘rateable value,’ which means a value assigned to a domestic or commercial building based on size, location, and other factors used to determine the price to be paid by its owner. For example, let’s take a property whose rateable value would be the assessment of the property’s annual rent.
if it were available to be rented in the market at a fixed valuation date from August 25, 2021, then the rateable values will be based on August 25, 2020.
More on Rateable Value
We got the basic idea of what this rateable value is and what is its significance.
The rateable value is an essential determinant in the taxation of any establishment, whether residential or commercial. Additionally, they may be preoccupied, frustrated, or partially preoccupied and partially frustrated. The question of rateable value has long been debated and pleaded. Looking at the factors that affect the rateable value, these can be Size of property, Location Proximity of property to specific landmarks, locality Inventory of furniture and equipment provided.
This value is fixed at a certain point. Because of this, it cannot exceed a certain point. The VOA has a significant role in this because it checks the property’s annual rent, size, and usage then reviews the values every five years. Furthermore, we can say that in a multi-tenant commercial property, each unit is assigned its RV.
VOA and the Government
At particular intervals, the rates of each property in the UK are revaluated, which is the review of all rateable values in England of all other businesses and non-domestic resources. Business rate bills are calculated using specific ratings. This means that the RV must be updated regularly to ensure that the bills stay accurate and fair.
During the Autumn Budget 2017, it was made clear that these revaluations would be done more frequently, i.e., every three years following the next revaluation. The government thought that this would increase the fairness of the business rate system set by VOA as the bills would now reflect the latest stats and rental value of the property.
In the spring 2018 statement, the Minister of Finance announced that the next revaluation would be one year before 2021, four years after the previous revaluation, so that taxpayers can benefit from the three-year revaluation at the earliest. It will be based on the market rental value as of April 1, 2019.
VOA will continue to assess the taxable value of non-residential properties at the commercial tax rate. In 2016, the government issued a discussion paper on more frequent revaluation deliveries. The interviewees of this article agreed to continue the VOA-led assessment. The government decided not to introduce self-assessment or model formulas at this time.
The Autumn Budget also took some other stems in this regard. These were
- The plan to advance the indexation of commercial interest rates will change from the retail price index (RPI) to the consumer price index (CPI) within two years of 2018. This means that commercial interest rates will be lowered every year, benefiting all taxpayers. The value of reforms in the next five years is 2.3 billion pounds. By 2023, the total amount of CPI changes will reach 4.1 billion pounds. It will increase significantly after that.
- Retrospective legislation to resolve the so-called ‘staircase tax’ allows affected taxpayers to require VOA to recalculate property valuations so that bills can be reset and rolled back to April 2010. This includes restoring the tax rate reduction for small businesses that have lost taxpayers due to it.
- The 2016 budget also announced that by 2022, the local authorities’ business tax rate system would be connected to the HMRC Digital Tax Account. The government has begun a three-year reassessment cycle from 2024 and aims to postpone implementation and implement the system at the earliest opportunity after that.
Above we saw all the necessary information that we must know about VOA. We saw how it affects and helps set up annual rent and taxation of various properties in the United Kingdom.
The VOA advice the govt. In setting up the market prices for the businesses and commercial properties, continue to work with local authorities, businesses, and evaluation agents as part of the move to more frequent reassessments.
The current system VOA requires that the appraisable value of a non-domestic property be assessed at a non-domestic rate (also known as a business rate).
The government has asked for views on VOA conducting more frequent re-evaluations. After implementing the new amendments, the govt. Seeks opinions from the stakeholders. Stakeholders had a positive response; they were happy with the periodic revaluation of their assets.
More importantly, most of the stakeholders agreed on the regular revaluation by the VOA. Stakeholder feedback has shown that VOA strongly prefers to continue to generate ratings as it does in current systems. Therefore, the government has decided to move the revaluation cycle every three years, where VOA continuously evaluates evaluable values and is not pursuing self-assessment and official-based options at this stage.
Benefits of VOA Business Rates
Many people are not aware of the benefits that VOA business rates can provide.
- The first thing to note is that it is a tax-free service, which means you won’t have to worry about paying any taxes on your property.
- There are many perks with these services as well such as a reduction in your council tax and an increase in the amount of rateable value you could charge for your property.
- VOA business rates also offers peace of mind when it comes to insurance policies. This is because they will cover all damages and losses incurred during the course of repairs if they happen before or after the contract date.
If you’re considering a new commercial property, be sure to explore your options. There are many advantages that come with choosing this type of space:
- Competitive rental rates
- Flexible terms , and more.