Commercial surveying news from the Beattie Partnership

Important Lessons for Schools About Rateable Value Changes

The process towards the 2017 Business Rates Revaluation is underway now, with the Valuation Office (VO) sending out its Forms of Return in order to gather all the relevant information for the revaluation. In the education sector, the VO categorises buildings according to their use, and a school’s overall rateable value is largely based on the estimated replacement cost (ERC) of its buildings.

Elements of schools change routinely, including their curriculum and successive fresh intakes of pupils, but what can cause a school’s rateable value to change?

The Beattie Partnership has compiled a guide to rateable values in the education sector, and in it we focus on the key elements that are likely to cause a change in rateable value. These are:

             new or refurbished buildings;

             changes to the use of existing buildings; and

             those areas where the Council Tax levy is involved.

New buildings and refurbished buildings will affect a school’s rateable value, as will upgrades to sports facilities and any acquisitions or sales of buildings.

With changes to building use, an adjusted replacement cost (ARC) may be applied to buildings that are both functionally and physically obsolete. So if a school has a building no longer in use that is earmarked for refurbishment, there may be scope for a reduction.

Where there is an interaction with Council Tax, such as shared domestic and non-domestic accommodation, including dining rooms, and property being vacated or newly occupied, this can have an impact on rateable values.

Ultimately, it’s important to be prepared for any potential changes by researching the impact of what these are likely to have. This is vital for future budgetary considerations because, regardless of what work is or isn’t completed at the time of the VO’s assessment, business rates are an ongoing commitment.

To get your copy of the report click here.  If you wish to have a specific discussion, please complete our enquires page and we’ll be in touch with you.