Leeds Dock

Our work - 17/02/2021

Mitigating Business Rates Liability in Leeds

We were instructed to mitigate liability for business rates for a client who was facing a significant increase in occupancy costs at their offices in Leeds city centre.

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The Challenge

  • The client was facing a significant increase in occupancy costs at their offices in Leeds city centre.  The Valuation Officer had altered the rating list to split the assessment for their existing space into numerous hereditaments, reflecting individual floors and removing their quantum benefit/size discount. This was as a result of the Supreme Court’s decision in Woolway (VO) v Mazars [2015] UKSC 53, and coincided with them considering taking additional space in the building.
  • The lack of the size allowance would have a significant impact on their future liability for business rates and overall occupancy costs, all at a time when they were beginning to experience substantial disturbance from a lengthy programme of adjacent building works.
  • We were instructed to advise on the prospect of mitigating their liability, taking into account that any additional space would not be occupied immediately.

Our Solution

  • Following the government’s commitment to legislate retrospectively to address the ‘unintended consequences’ of the Supreme Court judgement, The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018 allowed for a single hereditament of contiguous accommodation once again. 
  • We advised on a series of appeals to reverse the split of the client’s existing space and merge the floors to form a single rating assessment, followed by a further merger upon acquiring additional space to reflect the building in its entirety.  In addition, we agreed an allowance to sufficiently reflect substantial disturbance from adjacent building works.
  • We also advised on an early application for discretionary relief for part occupation under Section 44a of the Local Government Finance Act 1988 in order to minimise the rates payable whilst phasing occupation of the additional space.

The Results

  • We were able to maximise savings through appeals and relief entitlement whilst navigating the transitional effects to minimise the ongoing occupancy costs.  Savings achieved were in excess of £600,000 over the life of the 2017 revaluation period.

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