Business rates are a vital source of income for local governments, helping them to fund essential services such as schools, public transportation, and social care. However, when it comes to listed buildings, the calculation and payment of business rates can become a complex and contentious issue.
Listed buildings are those structures that are considered to have special architectural or historic significance, and are therefore protected by law from alterations or demolition. These buildings are often treasured as part of a country’s cultural heritage, and their preservation is a key priority for many government bodies and heritage organizations.
One of the key differences between listed buildings and other commercial properties is the way in which they are assessed for business rates. Unlike standard commercial buildings, which are valued based on their rental value, listed buildings are assessed based on their “rateable value”. This is the hypothetical rental value that the property could achieve if it were let out on the open market.
The rateable value of a listed building is calculated by the Valuation Office Agency (VOA), an executive agency of HM Revenue and Customs in the UK. The VOA takes into account factors such as the age, size, and condition of the building, as well as its historical significance and any restrictions on alterations or extensions. This can often result in a higher rateable value for listed buildings compared to standard commercial properties.
Once the rateable value has been determined, the business rates payable on a listed building are calculated using a multiplier set by the government. This multiplier is applied to the rateable value of the property to determine the annual business rates bill. In England, for example, the standard multiplier for 2021/22 is 49.9p, meaning that a property with a rateable value of £20,000 would have an annual business rates bill of £9,980.
It is important to note that listed buildings are eligible for certain reliefs and exemptions when it comes to business rates. For example, buildings that are used for charitable purposes or are occupied by a small business may qualify for relief on their rates bill. In some cases, listed buildings that are undergoing repair or renovation work may also be eligible for a temporary exemption from business rates.
Despite these reliefs and exemptions, the cost of business rates can still be a significant burden for owners of listed buildings, particularly those that are not generating rental income. Many owners argue that the high cost of business rates can make it difficult to maintain and preserve these historic structures, leading to concerns about their long-term sustainability.
In recent years, there have been calls for reform of the business rates system to better support listed buildings and other heritage assets. Some have suggested introducing a specific relief scheme for listed buildings, similar to the relief available for agricultural properties or small businesses. Others have proposed reducing the multiplier for listed buildings to reflect their unique characteristics and constraints.
In the meantime, owners of listed buildings are encouraged to explore all available avenues for relief and support when it comes to business rates. This could include applying for exemptions, seeking advice from heritage bodies or local councils, or exploring alternative revenue streams such as grants, donations, or heritage tourism.
Ultimately, the issue of business rates on listed buildings is a complex and multifaceted one that requires careful consideration and balancing of competing interests. While the preservation of these historic structures is of paramount importance, it is also essential to ensure that they are sustainable and viable for the future.
In conclusion, business rates can have a significant impact on the financial viability of listed buildings, and it is important for owners to be aware of their obligations and explore all available options for relief and support. By working together with government bodies, heritage organizations, and other stakeholders, we can ensure that these treasured buildings continue to be preserved for future generations to enjoy.