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Hints and Tips

Seven Tips for Saving on Business Rates
Improving profit sometimes does not require a great deal of effort – indeed, achieving a double-digit growth in profit may not be as difficult as many seem to think. It could in fact be just a numbers game.

While it may take a lot of planning, investment and associated risks to achieve 10% increase in profit through an increase in sales or process efficiency, it requires comparatively little effort, almost no additional investment and minimal risk to achieve that by saving through overheads alone.

Suppose your company’s profit margin is 10% on average, then a saving of just 1% on the total cost base would increase your profit by 10%. Let’s suppose the company’s overheads account for only 10% of the total cost base, then a saving of only 10% in overheads – or 1% of the total cost base – would be enough to increase your profit by 10% already. And achieving 10% saving on overheads is not a mission impossible by any measures.

So, how much is your company’s business rates bill compared with the total cost? Perhaps it’s small, but a saving on it could go quite a long way in improving your company’ s financial performance. And it’s dead easy!

Here are the seven tips from Expense Reduction Analysts for saving on business rates.

If you lodge an appeal on business rates before 31st March 2003, you could claim a rebate for the tax year ending 5th April 2003, and would pay lower for the following years until the next review in 2005.

Check the government website www.voa.gov.uk to see if your rates have been reviewed and reduced. Select the business rates tab and then check your ratable value and click the 2000 icon called 2000 Non-Domestic Rating List.

You may have received a result from a rates review recently, or you may have lodged an appeal recently and are waiting for the result, but that could be for the previous cycle (1995 - 2000) as it does take a long time for the authorities to review your appeal – even up to two years! So please check to make sure that the 2000-2005 cycle has been reviewed.

You can always do it yourself, but it definitely pays to get help from the experts, as they can negotiate with the Valuation Office on your behalf and put forward their arguments for your case. Negotiations are based on the analysis of property values within the vicinity, and often there are disputes concerning the interpretation and application of rental evidence.

If you decide to use an expert, ask them to work only on contingency fee basis (ie. no saving, no fees) so they will work their best to present your case. All you then need to do is to fax them a copy of your rates bill and wait for the rebate cheque to arrive from the Inland Revenue (normally between 9 to 12 months).

The savings on business rates will vary depending on the individual cases, but it’s not unusual to achieve a reduction in excess of 20%.

A reduction on business rates for the coming year plus a rebate for the current tax year (ending 5th April 2003) could add a few nice percentage points to your profit growth. So, act before it’s too late. Best of luck.