Business rates Q&A with Nick Sercombe

Emma Williams
By Emma Williams November 13, 2011 16:41

Business rates Q&A with Nick Sercombe

All the questions are taken from the 2009 GCMA Conference. The answers are still relevant today

Question: The wording accompanying the draft Rateable Value for 2010 appears to indicate that the Valuation Office (VO) will be sympathetic to appeals, is that correct?

Nick Sercombe: In my view this is a public relations exercise by the VO and before making any appeals you should ensure that you get professional advice.

Question: Over the past five years we have made significant investment in developments within the clubhouse and adjacent area. Do we need to advise the Valuation Office of these changes and will this increase our rateable value?

Nick Sercombe: Unlike other commercial enterprises, the valuation for business rates purposes of a golf course takes the form of land value per hectare (the course) as well as the floor area occupied by structures, that is the clubhouse, shop and accommodation facilities. The valuation of the land takes into account the quality of the course, such as how well established it is and if it has good drainage. So, the quality of construction of the buildings is taken into account, but you have no obligation to tell the Valuation Office of any developments and my suggestion is that you keep quiet about this until you enter the new 2010 rating list.

Question: Could the VO visit our premises?

Nick Sercombe: Yes, they do have the right to come to the course but have to give you advance notice of their visit.

Question: Will providing Sky television for our members affect our rateable value and thus our bill?

Nick Sercombe: Yes, this is a possibility as you are adding value to the club by increasing the services available to members. Part of how golf courses are valued is the quality of both the facilities and the fabric of the building, including what is available in the clubhouse.

Question: If I charge the use of some of the land within the confines of the golf course, will this affect the rateable value?

Nick Sercombe: Possibly, but it does depend on what the changes are. It could be that this would affect the value of the course, either increasing or decreasing it, but don’t forget there could be an opportunity for a temporary reduction if any construction work has a detrimental impact on members / players.

Question: If part of the course is unplayable due to work being carried out, such as course reconstruction, can I get a rates reduction?

Nick Sercombe: There is something called Material Change of Circumstance (MCC), where savings can be applied for when factors beyond a firm’s control affect trade, whether temporary or permanent. Some examples of MCC with respect to golf clubs include road works or construction work, which can cause noise and dust, which can impact on enjoyment by members. This construction work could be at the golf club itself so a good rating surveyor almost certainly would endeavor to get temporary rates relief for work on the club. We worked with a club who saved a considerable amount on their rates when they had new bunkers built.

Question: If a clubhouse and course is split by a road would this affect my rateable value?

Nick Sercombe: This should have been taken into consideration when the Valuation Office set the rateable value of the property, so it depends when the road was built and if the VO are aware of it and have reflected it in the value. If it’s not reflected in the rateable value then it is possible to get the rates reduced.

Question: We have a motor cross site adjacent to the golf club which has becomes a nuisance to members because of noise and general disruption, could this impact on our business rates? Could we get them reduced?

Nick Sercombe: Yes, it is possible to get the rateable value reduction because of this. The VO would want to see how tangible the impact is on trade, enjoyment of members and thus the value of the club.

Question: What does a ‘change of tone’ mean?

Nick Sercombe: If the area surrounding the golf course has substantially changed from the time the rateable value was set, that is construction of houses or industrial premises where this is deemed to be a change of tone, and the rateable value can be challenged and thus the business rates bill could possibly be reduced.

Question: We have very low flying aircraft frequently coming across the course, much to the annoyance of members and visitors – what can we do about it?

Nick Sercombe: Again this could be an opportunity to get the rateable value challenged as it is having a detrimental effect on the club. It is worth considering how long the aircraft have been coming over the course and if it has ever been taken into consideration by the VO before.

Question: We have a right of way across two parts of the course which frequently interferes with members and guests playing – what can we do about it?

Nick Sercombe: This should have been taken into account when the original rateable value was set. If not, a rating surveyor will most certainly put in an appeal and endeavor to get the rateable value reduced.

Nick Sercombe is a chartered surveyor of the Royal Institute of Surveyors (RICS) and has over 30 years of experience in business rates

Emma Williams
By Emma Williams November 13, 2011 16:41
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