Business rates are a major expense to any company and, according to Manchester-based CVS (Commercial Valuers and Surveyors Ltd), the majority of hoteliers are unaware these rates can be challenged. With hotels still being hit by a fall in profit per available room, the company, which has already saved its hotel clients over £7 million, says hoteliers are paying an average of 13.4 percent per year too much on their business rates.
Over 13,492 hotels have been assessed during the 2005 Ratings List, with a total Rateable Value liability of £947m, that’s an average rateable liability of £157,646. Successful appeals result in typical savings of over £21,000.
Through working with CVS in their appeals for the 2005 Ratings List, hotels across the UK have been able to achieve significant savings, including The Lanesborough luxury five star hotel in London saved in excess of £1M and the Donnington Grove Hall Hotel in Newbury, Berkshire which received a 30 percent reduction in its Rateable Value from £185,000 to £126,000 resulting in five year savings of over £85,000.
CVS Head of Rating, Paul Burnett, says: “Business Rates are a major expense to any company. However, it is often the case that the majority of commercial property occupiers are unaware that these rates can be challenged. However, from 31 March, your right to claim back overpaid business rates for the last five years will end when the next Rating List is introduced. This means that the clock is definitely ticking and time is running out to lodge an appeal against your rateable value before it is permanently altered.”
With time running out to appeal charges dating back to 2005, CVS is also warning that hoteliers should be looking to the future to ensure charges are accurate for commencement of the 2010 Ratings List.
“The Valuation Office Agency’s (VOA) approach to adopting a percentage of the hotel takings as a basis of arriving at your 2010 rating assessment is fundamentally flawed,” said Chris Barker, Senior Rating Consultant at CVS. “Currently hoteliers may be taxed on their expertise, levels of service and the nature of furniture and fittings. Rating assessments should be based on the rental values as at 1st April 2008 at a time when property values were falling.
“CVS will make sure that a client’s rating assessment is based on property values rather than on hotel expertise, provision of food and drink, service and furniture and fittings.”
CVS provides a full range of professional ratings appeal services. Paul Burnett explains: “When appealing overcharges, it is critical to have an in-depth understanding of how the rating system works, therefore using professionals, such as CVS, will achieve far greater results. We have already saved our clients in the sector a fantastic amount and have a significant number of on-going appeals.
“Furthermore, CVS clients have nothing to lose as the whole service fee basis is results only.”
CVS employs highly qualified Rating Surveyors, many of whom are former Valuation Officers. The company’s extensive experience includes Rent Reviews, Lease Renewals, Valuations and Building Surveying, all designed to maximise every potential saving for CVS clients.
The company has been operating since the late 1990’s. It has its headquarters in Manchester and has recently opened offices in London to cope with increasing demand for its services.
For further advice and guidance on how businesses working within the sector can reclaim business rates call +44(0)16 1291 0330.