Splitting a Property for Business Rates

Does one business rates assessment cover separate occupiers?

A commercial property may need to be divided into separate rating assessments when different businesses occupy and control clearly identifiable parts of it. This can happen in offices, workshops, warehouses, shops, industrial units and mixed commercial buildings.

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Business Rate Advisors Ltd reviews the occupation, prepares the supporting plans and evidence, and deals directly with the Valuation Office Agency (VOA). You will deal directly with Steve Adams or Mark Allen throughout your case.

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Request a free initial review

Send us the current business rates bill, a plan of the property and details of who occupies each area. We will review the initial information and explain whether there appears to be a reasonable basis for requesting separate assessments.

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What is a business rates property split?

A property split replaces one existing rating assessment with two or more separate assessments. For example, one workshop may be occupied by two unrelated businesses, each controlling its own section, access and equipment. If the facts support a split, the original assessment may be removed and separate entries created for the individual parts.

The VOA decides the boundary, description, rateable value and effective date of each new assessment. It is not simply a matter of dividing the existing rateable value.

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When might a property need to be split?

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• Different businesses occupy separate parts of a workshop, warehouse or shop

• Individual companies occupy separate floors, office suites or industrial areas

• Part of a property has been sublet or separately sold

• A landlord retains one area while a tenant controls another

• The current assessment no longer reflects the actual occupation

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The VOA will look beyond the postal address and consider what happens at the property in practice.

The three questions that matter

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1. Who occupies each part?

Business rates depend on rateable occupation. The VOA will consider who uses each area, what they use it for and whether they have sufficient control over it. Useful evidence includes leases or licences, rent payments, keys or access codes, signage, equipment and day-to-day working arrangements.

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2. Does each occupier have proper control?

Paying to use an area does not automatically make someone its separate rateable occupier. A separate assessment is more likely where one business uses a clearly defined area for its own purposes, controls access and can prevent others from using it. The practical arrangement matters as much as the wording of an agreement.

 

3. Are the separate areas clearly identifiable?

The VOA must be able to identify the extent of each proposed assessment. Walls and separate entrances are strong evidence, but they are not the only factors. A floor, office suite, workshop bay or defined section may form its own assessment if the occupation is clear and stable. A useful plan should show boundaries, access routes, shared areas and the occupier of each part.

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Is a formal lease required?

No. A tenancy, licence, verbal agreement or other arrangement may support a separate assessment if the evidence shows who occupies and controls the area. Where there is no formal lease, rent records, correspondence, photographs, signage and access arrangements become particularly important.

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What if facilities are shared?

Shared toilets, kitchens, corridors or entrances do not automatically prevent separate assessments. The key question is whether each business separately occupies and controls its own principal area. Plans should clearly distinguish between exclusive and shared space.

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Will a property split reduce the business rates bill?

Not necessarily. The VOA will value each new assessment separately, so the combined rateable values may be lower than, similar to or higher than the original assessment. The final bill can also be affected by relief, transitional arrangements, empty-property liability and the effective date. A split does not guarantee Small Business Rate Relief. The local council decides liability and relief after the VOA creates the new assessments. We consider the likely consequences before recommending that a split is pursued.

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What evidence will be needed?

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• The current business rates bill and VOA valuation

• A plan showing each proposed assessment and any shared areas

• Leases, licences or other occupation agreements

• The name of each occupier and the date occupation began

• Photographs, access details and rent-payment records

• Relevant correspondence with the VOA or council

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The evidence should present one consistent account of the occupation. Conflicting names, dates or plans can delay or weaken a case.

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How we can help

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• Review the existing assessment, occupation and property layout

• Check agreements, plans, photographs and access arrangements

• Identify exclusive and shared areas and the correct effective date

• Assess the likely valuation and relief consequences

• Prepare and submit the case to the VOA

• Respond to enquiries and check the resulting council accounts

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What happens if the VOA agrees?

The VOA will normally alter or remove the existing assessment and create separate entries for the individual properties. Each will have its own description, boundary, rateable value, effective date and reference number. The council should then amend the corresponding business rates accounts.

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What if the VOA refuses the split?

The next step depends on the reason given. It may be possible to provide clearer evidence, correct the application or pursue the matter through Check and Challenge. We can review the decision and advise whether there is a proper basis for continuing.

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Split, merger or reconstitution?

A split may be appropriate where different businesses occupy distinct parts of one assessment. A merger may be needed where the same business occupies adjoining areas that are assessed separately. Some properties need a wider reconstitution. We establish the correct rating-list outcome before preparing the case.

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Why choose Business Rate Advisors Ltd?

Direct adviser contact

You will deal directly with Steve Adams or Mark Allen.

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Evidence-based preparation

We examine the occupation, agreements, plans, photographs and access arrangements before submitting a case.

 

Clear advice on risks

Not every shared property should be split. We explain any weaknesses and consider the likely effect on rateable values, relief and council accounts before recommending that you proceed.

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Request a free initial review

Please send the current business rates bill, full property address, a plan showing each occupied area, the names of the occupiers, relevant agreements, occupation dates and recent photographs.

Call Steve Adams on 07415 048643
Call Mark Allen on 07376 443943
Office: 01225 667747

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For property merges click here or for property deletions click here.