The next business rates revaluation will be based on rental values set at April 1 2015 and national property consultancy Lambert Smith Hampton is urging firms to be cautious when negotiating rents and lease terms.
The Valuation Office Agency is likely to pay particular heed to agreements made around now. They may become key evidence when the VOA compiles the next rating list, which will come into force in April 2017.
LSH associate director – rating Graham Heilbuth said: “We are urging all occupiers who are considering taking on new leases or who are currently faced with rent reviews or lease renewals to look very carefully at whether the rent that is contemplated corresponds to open market rental value.
“Where tenants have not been represented and high rents or nominal increases at rent review or lease renewal have been agreed, there is a real danger that their future rateable values may be set at unduly high levels, when the new Rating List comes into effect.
“It is vital that businesses realise that there is a bigger picture. Every pound saved in a rent negotiation has the potential to save the organisation more in terms of future outgoings.”
He also reminded businesses that the government announced in its Autumn Statement that it intends to apply a cut-off in respect of appeals relating to assessments within the current 2010 Rating List.
Appeals lodged from April 1 this year will not be able to re-visit the first five years of the list, Mr Heilbuth added.