Hotel Business Rates

Unlock real savings now, and into the future

Hotel owners and operators face unique challenges in managing their properties, including the significant financial impact of business rates liabilities. Specialist skills are critical to evaluating a hotel to ensure a fair representation from the appraisal of the market’s perception of trading potential, the competitor influences at a micro and macro level along with other essential indicators.

IMPACT OF REVALUATION 2023 ON HOTELS

The 2023 Revaluation came at a particularly sensitive time for hoteliers and provided an opportunity for Rateable Values to be recalibrated to properly reflect market changes since the last revaluation.

ing potential as is the case for all types of hotel valuations. There are agreed frameworks of valuation that have ensured assessments have been kept as fair as possible under the rating regulations. The frameworks have been driven by detailed analysis of trading accounts reflecting not only total revenues, trading profiles and Revenue Per Available Room (RevPARs) but also costs and allowances for items such as repairs and maintenance, renewals funds, head office costs and tenant’s share of profits.

The agreed frameworks are a major step forward in ensuring rates liabilities for hoteliers have, in many cases, been kept to a minimum, but strong negotiations of individual cases within the frameworks are vital. Gerald Eve reported to and received the approval of the UKHospitality, who we represent, before formal agreement of the valuation basis with the Valuation Office Agency (VOA). It is now the individual valuations we are focusing on.

Bed and breakfast style hotels are valued on a different basis whereby a rate per room type is applied.

Scottish hotels are dealt with by the Scottish Assessors Association, who did not reach an agreement with us ahead of the current rating roll. This means we are negotiating the basis that should be applied to our clients’ assessments with the Assessor.

Regulatory compliance

England and Wales

Non-Domestic Rating Act 2023

The Non-Domestic Rating Act 2023 will introduce potentially onerous mandatory obligations on ratepayers to regularly update the tenure and physical details of all properties within their portfolios with the Valuations Office Agency (VOA).

Increasing the administrative burden on businesses, it will require prompt updates to the VOA and annual returns even where there are no changes, with penalty risks for non-compliance. The complexity of business rates management will increase with measures anticipated to be fully in place for the 2026 Revaluation.

Material Change of Circumstance (MCC)

Legislative changes to Material Change of Circumstance provisions took immediate effect in October 2023. They tighten the scope of MCCs in England so that new legislation, licensing regimes and guidance from public bodies will not be grounds for a change in Rateable Value between revaluations.

Completion Notices

For buildings that have been temporarily removed from the rating list during redevelopment, billing authorities will be able to issue Completion Notices in the same way as for a new building. The regulatory changes should be in effect from January 2024.

Scotland

Since January 2023, Scotland’s new legislation has transferred Valuation Appeals to the Scottish Courts Tribunal service. This entails strict deadlines and rigorous requirements for ratepayers and advisors. All appeals against valuations from April 2023 should have been submitted as a comprehensive case with supporting data by 31 August 2023. Learn more about how to appeal business rates in Scotland >

How we can help

We understand that business rates can be a complex, costly and challenging area for hotel operators to navigate. Our team of hotels business rates experts has extensive experience in the hotel industry and is committed to providing you with tailored advice and guidance to manage your business rates liabilities effectively. Whether you own a single boutique hotel or manage a portfolio of international luxury resorts, our bespoke service is designed t

Complementary Health Check

We will always provide an initial review of your rates position. This allows us to identify risks, opportunities and ensures you are happy to proceed fully aware of what to expect when it comes to understanding business rates.

Review and Appeal

When your Rateable Value looks excessive, we review and start the initial process of appealing your assessment. This review includes several methods used to ensure you always pay the correct business rates bill. We know when to challenge and when to leave well alone. This insight and our forensic attention to detail translate into successful appeal strategies.

Budgeting and Forecasting

Our budgetary advice allows clients to understand their current and future liabilities on existing and new sites as well as new technologies. Our financial forecasts can be high level and more detailed as required and are regularly updated to reflect changes in budgetary assumptions resulting from government announcements and pending revaluations. This ensures that investment decisions are made on sound budgeting advice and track of your risk and exposure at any given time.

Disturbances and Deletions

Undergoing building works to your property? We aim to reduce your rates during the duration of any works you carry out. If you find yourself next to a building site, road works, scaffolding over your property or any other disturbance, we aim to secure a reduction in your rates during the length of the works.

As well as dealing with disposals, demolitions and temporary disturbances, we also work with Valuation Officers and Scottish Assessors to manage and, where possible, ‘prior-agree’ alterations to assessments to reflect new buildings and other estate changes.

Exemptions and Reliefs

Properties are entitled to different exemptions and relief based on certain criteria. Reliefs and exemptions can be difficult to navigate and understand. We make understanding your entitlements easier by reviewing each of your properties to ensure you receive your relief and exemptions, if applicable.

Vacant Properties

Vacant property can be expensive to run and difficult to maintain and secure. We advise and manage empty rates mitigations schemes for you. We advise you on the best way to mitigate your rates liability depending on your circumstances and goals.

Historic Rates Audit

Overpayments made against business rates assessments can easily go unnoticed. Our historic rates audit ensures that past errors and overpayments are resolved and refunded in a timely manner. We also meticulously track and trace any properties you have disposed of to see if you are owed any refunds.

Rates Payment Management Service (RPMS)

We remove the hassle of multiple payments across all of your properties. We provide you with one monthly payment request; we then take care of the rest paying individual councils on your behalf. This minimises errors, enforcements and bailiff actions.

9.3bn

total Rateable Value handled

£1.3bn

client savings since 2017, £3.8 bn since 2010

25%

of the FTSE represented