Business rates are a tax that is imposed on most non-domestic properties, including listed buildings. Listed buildings are those that are deemed to have special architectural or historic significance, and as such, they are protected by law to prevent unauthorized alterations or demolition. However, despite their protected status, listed buildings are not exempt from paying business rates. In this article, we will explore the implications of business rates on listed buildings and how owners can navigate this financial burden.
Listed buildings are classified into three grades: Grade I, Grade II*, and Grade II. Grade I buildings are of exceptional interest, Grade II* buildings are particularly important, and Grade II buildings are of special interest. These classifications are determined by Historic England, the government body responsible for listing buildings of historical and architectural importance. Listed buildings are often sought after for their unique character, charm, and historical significance. However, owning a listed building comes with its challenges, one of which is the payment of business rates.
Business rates are calculated based on the rateable value of a property, which is determined by the Valuation Office Agency (VOA). The rateable value is an estimate of the open market rental value of the property at a particular date. Business rates are a significant operating cost for businesses, and listed building owners are not exempt from paying them. This can put additional financial pressure on owners of listed buildings, as they may be required to invest in costly repairs and maintenance to preserve the historic fabric of the building.
The impact of business rates on listed buildings can vary depending on the grade and location of the property. Grade I listed buildings are often prestigious and located in prime city center locations, which can result in high rateable values and, consequently, higher business rates. Grade II buildings, on the other hand, may have lower rateable values, but can still face substantial business rates bills. Owners of listed buildings must factor in business rates as part of their overall operating costs and budget accordingly to avoid financial strain.
One way in which owners of listed buildings can mitigate the impact of business rates is by applying for listed building consent to carry out repairs and alterations. Listed building consent is required for any alterations that affect the character or appearance of a listed building, and owners must seek approval from the local planning authority before making any changes. By obtaining listed building consent, owners can demonstrate that they are investing in the preservation and maintenance of the building, which may be taken into account when determining the rateable value and, ultimately, the business rates payable.
In some cases, owners of listed buildings may be eligible for business rates relief or exemptions. The government offers a range of relief schemes for businesses, including small business rate relief, rural rate relief, and charitable rate relief. Owners of listed buildings that are used for charitable purposes or are vacant may be eligible for relief on their business rates. It is important for owners to be aware of the available relief schemes and to check whether they qualify for any exemptions to reduce their business rates liability.
Another option for owners of listed buildings is to appeal against their rateable value if they believe it is inaccurate. The VOA is responsible for assessing rateable values, but owners can challenge the assessment if they have evidence to support a lower valuation. By appealing against the rateable value, owners can potentially reduce their business rates bill and alleviate some of the financial pressure associated with owning a listed building.
Overall, business rates can have a significant impact on listed buildings and their owners. The financial burden of paying business rates, coupled with the costs of preserving and maintaining a listed building, can make ownership challenging. However, by seeking listed building consent, exploring relief schemes, and appealing against rateable values, owners can navigate the complexities of business rates and ensure the long-term sustainability of their historic property.