Following our recent
update on business rates, we are warning developers to
look at their budgets for statutory compensation that may be due at
the end of a 1954 Act protected tenancy because of the VOA's
reassessment of rateable values, which comes into force next April
2017. The timing of the notices served to end the lease could
change the amounts to be paid very substantially.
Key Business Rates Changes
On 1 April 2017, the rateable value of properties will be
reassessed for the first time since 2010.
Some occupiers know they are facing a substantial increase in
The Valuation Office Agency published its draft revised
valuation list on 30 September 2016 and the government's
business rates calculator can now be used to check what the
rateable value for specific properties will be from 1
Effect on Statutory Compensation Payments
1954 Act statutory compensation payments are calculated based
on the rateable value of the relevant property at the date of the
relevant landlord's notice (more on this below).
The rateable value used to calculate the statutory compensation
due to a tenant is based on the valuation list in force at the date
either of the following is served:
The landlord's notice ending the tenancy (section 25
The landlord's counter-notice opposing the tenant's
request for a new tenancy.
31 March 2017 is the last day on which the old valuation list
will be in force and so the timing of service of either of the
above notices could have a significant impact on the amount of
statutory compensation due to some 1954 Act protected tenants.
The service of the section 25 notice by the landlord can, of
course, only take place during the last 6-12 months of the lease
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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