Non-domestic Rates

HM Treasury written question – answered on 25th April 2017.

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Photo of Dan Jarvis Dan Jarvis Labour, Barnsley Central

To ask Mr Chancellor of the Exchequer, for what reason the rateable value of pubs and restaurants is assessed on the basis of turnover whereas that of other businesses is assessed on profit.

Photo of Jane Ellison Jane Ellison The Financial Secretary to the Treasury

The Rateable Value of a property is the annual rent it would achieve if let on the open market at a valuation date set in law. The Valuation Office Agency (VOA) determine Rateable Values by referring to rents agreed on similar properties in the local area. Most non-domestic properties, such as offices, shops and restaurants, are assessed on the basis of their rental value per square metre in line with what happens in the rental market.

Rents paid for public houses are also used to determine the appropriate Rateable Value. The approach of valuing per square metre is not used as the market uses trading potential (turnover) to determine levels of rent. This is a recognised way of valuing pubs and has been agreed between the VOA and a number of trade associations.

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