Rural Planning Co’s Justin Stevenson breaks down business rates for glampsites.
Business rates are taxes designed to help fund services in a local authority. The government charges business rates on commercial properties including those used as holiday lets, including glampsites.
In order to work out how much a property is required to pay, a valuation is placed on it called a ‘rateable value’. This is based on what the whole enterprise could be let for on the open market to someone to operate as a similar business. Sometimes, in more complex cases, the rateable value will be based on profitability.
Once the Valuation Office has set the rateable value then your local council will use this to calculate your business rates bill using either the standard or small business rates multiplier – for 2022/23, these are 51.2p (standard) and 49.9p (small businesses).
Glamping business specifics
With holiday lets in England you will not need to pay business rates if the number of nights available to let per year is less than 140. The same applies in Wales but there is a second test – actual nights let has to be under 70. If you don’t meet these tests then the property is charged council tax rather than business rates
The cost of your glamping structures makes no difference to your business’s rateable value – the district valuer will be looking at the size of your site, its type, location, quality and likely income each unit will generate. For properties with a rateable value of less than £51,000, then your council will have to use the small business rates multiplier rather than the standard rates one.
If your business is rated at £12,000 or less you get 100% relief on business rates. Properties with a rateable value of £12,001 to £15,000 enjoy relief that goes down gradually from 100% to 0%. For example, if your rateable value is £13,500, you’ll get 50% off your bill. If your rateable value is £14,000, you’ll get 33% off.
Some Examples
• For a glampsite with 10, year round cabins in a desirable location generating healthy profits with a rateable value of £25,000, business rates would be calculated using the small business multiplier: £25,000 x 49.9p = £12,475 per year.
• For a seasonal glampsite in England with 10 bell tents let out for 100 nights a year, no business rates would apply
• For a farm diversification with three safari tents let out from April to October and a rateable value of £10,000, 100% business rates relief would apply.
If different properties are run by different business structures within one family (such as a diversified estate or farm) then it is important that each business is noted as the business rates payer to maximise any small business rates relief available.
As a business expands and you either take on more than one property or you expand the number of units on site then the rateable value may increase over £15,000 and you will lose the small business rates relief. Likewise if the rateable value of your property increases to £51,000 or more then the council will start to use the higher standard rate multiplier to calculate your business rates bill.
If you have a new venture then it will take a little while to get your business valued by the valuation office. But watch out – a council can charge rates back to when your business started or up to six years, whichever is less. Not notifying the valuation office of your existence may save you cash flow worries in the short term but you will probably end up with a bill eventually.
If you disagree with your rateable value, you do have the opportunity to appeal. The Valuation Office Agency (VOA) website holds the business rates records for every commercial property and is a great place to research if challenging a valuation. However, if you really need help it’s best to get advice from a specialist independent valuer or chartered surveyor.
QUICK INFO
• Small business multiplier 2022/23 (rateable value under £51,000) – 49.9p
• Standard business multiplier 2022/23 (rateable value over £51,000) – 51.2p
• Small business rates relief is available for businesses with a rateable value under £15,000
• 100% relief for businesses with a rateable value of under £12,000
• No business rates are charged on properties let out for under 140 nights per year in England, 70 nights in Wales
• Estimate your valuation at www.gov.uk/calculate-your-business-rates
About the Author
Justin Stevenson MRICS FAAV is a senior planning consultant and chartered surveyor at The Rural Planning Co. If you want to understand how planning impacts business rates speak to The Rural Planning Co. www.theruralplanningco.co.uk
