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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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Hi there, I have decided to make an offer on a property in

Customer Question

Hi there,
I have decided to make an offer on a property in London; however, the offer depends on finding the resolution to a business rates question I have.
The unit is advertised as one unit. However, it is effectively two units that have been merged together recently. There is a dividing wall down the middle of both units, with a large opening in the wall where you can walk from one unit to the other. The unit is 5 &*****
The reason this is relevant is that for the purposes of business rates, the unit is split into two different units. One has a rateable value of £7100, and the other has a rateable value of £7700.
As a new business I would look to attract small business rates relief. When you add the rateable values together it makes £14,800. This would not yield any significant rate relief, and the business rates would be over £7000. However, if you split the properties into two different units, and claim rate relief on both individually, the small business rate relief is significant, and the business rates would drop down to around £1500.
To attract this rate relief, I would like to make an offer with two separate companies, with different names on the leases. I would be prepared to do this, and create two entirely separate companies, both with myself as the company Director; despite the fact that both companies would effectively be offering the same service and the office(s) would be used for the same thing. My question therefore, is if I do this, and take out a lease on both properties with separate companies, am I in some way breaking the business rate rules? In effect, I would be taking on liability with two separate company entities, so I don’t see why I would be. However, it is not clear to me.
Any help would be hugely appreciated.
Thanks
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,
I agree with you, the business rates liability is with the company, which is a separate legal entity from you, so although you may be a director and shareholder of both companies, they are effectively two separate businesses in law and should each qualify for business rates relief in their own right as each company will have its own lease for each unit. The fact that you can access both units does not make it a single unit.
May I help further?