Acting on behalf of Arc Inspirations, based in Headingley, Leeds, we have successfully reduced the Rateable Value of Napa Bar and Kitchen on Street Lane in Leeds, by over £70,000, following a recent Valuation Tribunal hearing.
Difference in Ratable Value sparked case
Following an extension to Napa, the Rateable Value (RV) of the property was increased from £40,000 to £130,000, and increased again to £151,000 following the 2010 List Revaluation. Our valuation of the property was £59,500 rising to £65,000.
The difference in value came about because the Valuation Office, (a department of HMRC responsible for setting the levels of value of all business premises in England and Wales), valued the property using estimated turnover figures as opposed to a valuation method based upon actual rental levels, our preferred method.
Case put before the Valuation Tribunal
The Valuation Office refused to accept our method of valuation, so the case was put before a Valuation Tribunal who decides the RV of business properties based upon the evidence put before them when two parties cannot agree.
Reduction in rateable value of £59,500
The panel agreed that the property should have been valued using the rental method, in line with other properties in the parade. The value was reduced accordingly to £59,500. The 2010 Revaluation figure has subsequently also been reduced by £86,000 to £65,000 RV following this decision.
Increase in RV puts a severe strain on cash flow
Cian O’Carroll, Senior Surveyor at our office in Leeds, who took the case, said: “This case highlights some of the problems of using a method of valuation based upon the amount of food and drink an occupier is estimated to sell.
“Whilst it may be acceptable to use this method in certain circumstances, it is not the only method that can be used and alternatives should be considered. Such a large increase in RV puts a severe strain on businesses’ cash flow, so it is important that values are checked properly and challenged where appropriate.”