Hanway Commercial were recently instructed to provide business rates advice to one of the largest Costa Coffee franchisees in the UK – SME Group Plc.
The franchisee has expanded their portfolio of Costa Coffee stores significantly over the past few years and most recently have acquired two new sites in Harrow and West Drayton.
The first site in Harrow comprised the acquisition of three adjoining retail units (which were bought on a freehold basis), our client began strip out works 1st July 2019 to merge the three self contained retail properties addressed 123, 125 and 127 Kenton Road to create a new single unit. Due to structural issues and Covid 19 there were significant delays to the works, at the time works commenced the client (along with many other businesses) were not aware of Business Rates Deletion requests as form of mitigation. From early discussions with the client Hanway Commercial were able to identify this as a means of providing crucial rates relief to the client.
Hanway, as a result, were instructed to prepared an in-depth “check” appeal submission to the Valuation Office Agency, which detailed the clients comprehensive redevelopments works at the subject property. The appeal was submitted prior to practical completion in August 2021. This is an important point due to the difficulty of getting deletions applied to the rating list retrospectively i.e. once works have completed. Hanway Commercial were able to reach an agreement with the valuation office to get their assessment deleted from the rating list by supplying evidence that the property was incapable of beneficial occupation during the programme of works. Included within the submission was; detailed photographic evidence, projected capital expenditure estimates, a full schedule of works with a timeline of events, along with details of relevant rating case law. Although the appeal was submitted by the team towards the end of the programme of works, due to the detailed evidence provided we were able to backdate the deletion to the date works commenced in July 2019, allowing our client to benefit from zero rates liability and substantial savings while these works were ongoing.
Hanway were later able to bring the new merged assessment back into the 2017 list through notifying the Valuation Office and Local authority and prior agreeing the new rating assessments, this in turn allowed the client to apply for any grants and reliefs they were entitled to at the time.
We were subsequently instructed us to carry out a similar deletion request for their West Drayton store. Works on this store also began July 2019 and again were significantly delayed as a result of covid, due to the evidence provided in the appeal submission we were also able to successfully backdate the deletion to the date works commenced, which again amounted to substantial savings.
COVID 19 has had a huge impact on an already struggling retail sector, this has been reflected by the numerous business rates reliefs and grants that have been available to retail, leisure and hospitality occupiers. Whilst these reliefs have provided much needed support to occupiers, to be eligible for such grants and reliefs an occupier must be trading. Covid however has caused significant delays in supply chain for materials and labour issues, highlighted by these two cases. As a result this has prolonged the fit out period for many occupiers, eating into vital rent free incentives and has delayed the time taken for occupiers to commence trading, which therefore has detrimental impacts to turnover in the early months of trading. Business rates liabilities to many occupiers are a significant overhead, which highlights the importance of Deletion appeals as a form of rates mitigation for occupiers prior to the date they commence trading.
If you have recently taken occupation of a premises and are currently undergoing or planning refurbishment/ redevelopment works please contact Oli Hartley, Paul Wise, Mark Short or Alex Thomson for further information on how we can assist with your Business Rates appeals and mitigation.