Business rates help in new salon

[kirsty_]

i'm hoping someone with a business head can help me as dont seem to be getting any sense out of council or valuation office. i am looking to rent a shop that is currently a bridal dress shop so has big open retail space making the rateable value on bus rates v high. if i get the shop i would be putting stud walls up to create 2 beauty rooms and a small office/storeroom - does anyone know if this reduces the rateable value as it is effectively less retail space? many thanks

 

[persianista]

I don't think stud walls make any difference. I trust you have spoken to your local valuations officer? I think the rules are frontage x gross internal area= rates. Otherwise everyone would partition up their shops to bring the rates down.

 

[tog]

Persianista is right - rateable value is based on the total square footage which the premises occupies. How you partition it up is of no relevance, the business rates will stay the same.

 

[Rhhonda]

Not sure about Wales or London. In Scotland Small businesses have been ( all depends on the size tho) given a 100% grant for business rates, might be worth while contacting your local council to see if the same goes for you guys.

Rhonda

 

[jes]

Storage area is, typically, 10% of the value of the retail zone (100%) it once was. Your beauty rooms would still be charged at full retail zone value (100%)

Trouble is that I'm not sure if the VOA will see stud walls as a permanent change to your shop layout. If you haven't yet arranged for planning permission then it would be worth asking the inspector about the walls when he comes

jes

 

[angelina221]

I have studded walls in my salon. I have 9 rooms but 2 of them were divided into 2 but the rate stays the same. You don't pay rates on rooms that have a toilet.
I've just had my estimate for next year and it's all broken down on the estimate so you can see what costs what. It goes on square footage.
I also got 5 years small business relief-i got 50% discount.

 

[champagne]

Dont forget to ask for the small business rates if it is applicable....its not as expensive as you might think x

 

[Martin Duffy]

As it's 2010 the properties are all being revalued at the moment (they do it every 5 years), and business rates are worked out by using a multiplier, i.e. they multiply the rateable value (set by the VOA) by a figure (set by government) to get your business rates (which are reduced if you qualify for small business relief). If you go to the following website it will further help you:

VOA Business Rates : Home

As to partitions, I am fairly certain dividing the space doesn't come into it. They work it out into zones, the first 20 feet by the front window being the most expensive, the next 20 feel being less so & the next 20 being even less. However you can see all this on the above link!

 

[jes]

No, the VOA will re-evaluate how your shop zones are used. However they will need to see the planning permission and plans etc to see it is a permanent change.

jes

 

[kirsty_]

I have studded walls in my salon. I have 9 rooms but 2 of them were divided into 2 but the rate stays the same. You don't pay rates on rooms that have a toilet.
I've just had my estimate for next year and it's all broken down on the estimate so you can see what costs what. It goes on square footage.
I also got 5 years small business relief-i got 50% discount.

50%!!! wow thats a lot for such a big space. spoke to them today and as it is over £10k rateable value then no small business relief - strange though because if you have 9 rooms you must have a big space yet your rates must be lower than £10k - what area are you in? It is working out that the rates will be £505 per month before rent/bills!! Gutted :cry:

 

[jes]

Hi Kirsty,

If your rateable value is, say, £10K you wont pay £10K in rates. The government (I think) sets a 'National Multiplier' which is about £0.48. Your rateable value is then multiplied by this so you will pay £4,800. If you qualified for small business relief, this would then be halved to £2,400

... hope that makes sense

jes

 

[kirsty_]

Hi Kirsty,

If your rateable value is, say, £10K you wont pay £10K in rates. The government (I think) sets a 'National Multiplier' which is about £0.48. Your rateable value is then multiplied by this so you will pay £4,800. If you qualified for small business relief, this would then be halved to £2,400

... hope that makes sense

jes

hi, yes understand all that - the rateable value is £11750 and as it is over £10k it doesnt qualify for small business rate relief. they multiply it by 0.481. My prev comment was regarding that she has 9 rooms and yet her rateable value must be low for her to get all that discount

 

[Saya]

Kirsty,

You might need to check that again, last time I checked (earlier this year) it wasn't based on rateable value, it was based on what the rate comes up as and if it's below £5,000.00, then you can have it halved on the rates relief, bringing it down to under £2,500.00 or less .
It also matters when you do it, as you would have to get the relief application in before the end of that rate year.

Also, if you really work with the valuer, you can get acute reductions on areas that are taken by the partitions themselves or fixed storage e.g if you have raised platforms to your window display areas, this can be argued to be excluded.

So, it appears you do qualify and do it quick, before the rates sharks start chasing you! :green:

I did wonder about toilets and shower room, but I don't know how it works out for the staff room, which also serves as kitchen and storage.

 

[angelina221]

Ok i just got my break down sheet out. My rateable value is £4750.
As i said before, 2 of the rooms have been divided so it gives me the rates for 7 rooms plus the reception/entrance.
Salon 34.30 m2 -worked out at £50 per m2 so value is £1715
Salon 21.70 m2-worked out at £50 per m2 so value is £1085
Salon 5.80m2-worked out at £50 per m2 so value is £290
Salon 6.10-worked out at £50 per m2 so value is £305
Salon 13.50-worked out at £50 per m2 so value is £675
Staff toilets n/a
Staff room 10.20m2- worked out at £25 per m2 so value is £255
Reception/entrance - worked out at £50 per m2 so value is £470

Hope you followed that-lol

So the rateable value is £4795 but it is not the amount you pay. You roughly pay about half and then if you get small business relief you get another 50% off.
If you go to

www.businesslink.gov/estimaterates

you can then estimate your rate bills

 

[junejuno]

You are rated on square footage whatever you do BUT it depends what you use each room for. For example, a store room is rated less per square foot than a therapy room or salon room, as are kitchens.

We used one of our big rooms as a store room and another biggish room as a staff room rather than a smaller one we could have used.

We do have a lot of rooms though and you may not have that choice, but certainly dividing rooms and using some space for storage and facilities should reduce the rates you pay. I hope that helps

 

[kirsty_]

it only reduces the rates if they are structural walls, you cant put up stud walls and expect this is change them as they ignore non structural walls - have had long conversation with valuation office and the rates are def £475 per month, that is after any discount available - must be because it is in chester city centre