The prospect of moving house is fairly daunting and the concerns and considerations concomitant with private property moves are presented in a magnified fashion when one is considering moving premises for commercial purposes: is it affordable, what is the right location to maximise custom, how best to use space when space is increasingly at a premium etc.? IMI Magazine’s ‘moving’ special seeks to answer these questions and provide you with a plan of action if you are considering a relocation.
Businesses looking to upgrade or relocate premises may, like Phil and Kirsty, be focused on ‘location, location, location’, but those who ignore other key factors when deciding upon a new site could end up with a property headache that even the dynamic duo can’t cure. Whilst a property may be suitable in physical terms there are many issues that a site inspection won’t necessarily reveal.
For example, planning consent may be required for building work but also for a change of use which, with traditional stock in short supply, is an obstacle many are having to traverse. Current legislation requires that changing a property into a car showroom or workshop will almost always need planning consent. ‑is will need a planning application and whilst a decision should be available within three months this can, in some cases, take longer. A relocation plan should always include an appraisal of whether planning consent is required at any stage and, if so, a timeline introduced which factors in delays and mitigates any potential risk to business.
The lie of the land
It has also been known for some businesses to take properties without taking a survey which, whilst less of an issue for a new property, can add a significant cost if repairs are required on older facilities. For example, if a roof needs replacing five years into occupation it is not just the cost to consider but the disruption to the business as well. Meanwhile, rights of way and title restrictions continue to be factors, but these can be navigated with the help of a good solicitor. Businesses should, though, also be prepared to look beyond the confines of a proposed new site and keep in mind issues and developments in the local area. A proprietor, for instance, may have just relocated to the perfect site, and invested heavily to fit out the unit, only for the site to be bypassed, or a nice quiet neighbouring unit turned into a waste centre.
Relocation can be taxing
Upgrading facilities is a significant investment and tax liabilities can impact on expansion plans.
However, George Osborne’s 2016 Budget did contain some good news for business owners on the tax front. A new stamp duty slice system provides smaller operators a cut in their tax bill, with 0% owed on the first £150,000 and 2% on the proportion between £150,000 and £250,000 (though the largest investors and developers are hit with an increase, around 90% overall have had the bills cut or kept the same). Business rates, too, were addressed by the Chancellor and, while the root-and-branch reform many operators are hoping for hasn’t materialised yet, the threshold for rates relief has doubled – giving permanent exemption to many. The business rates system must still be navigated with care, though, when considering new premises and values. Rates charges can be appealed, but the current rates are still payable until an appeal is successful, at which point a refund will be provided.
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