SIPP and SSAS members affected by Reduced Business Property Rates

Business Rates
Prior to April 2008 commercial properties which remained unoccupied were entitled to pay a reduced level of Business Rates. From April 2008 the reduced rates will be available for a shorter period of time and the new rules are:

1. There is a zero rate for an initial 3 months for business premises other than industrial and warehousing.



2. Industrial and warehousing properties enjoy freedom from rates for 6 months.



3. The three or six month period, as the case may be, begins from when the properties fall vacant, even if this occurred before 1st April 2008. So premises that have been vacant for some time before that date will become liable for rates at the full rate immediately.

This is not helpful for SSAS or SIPP schemes which own properties and will increase costs. There is now an even greater incentive to seek new tenants actively at the end of a lease.


Energy Performance Certificates
New regulations have recently been introduced in connection with commercial property to issue energy performance certificates, just like for residential properties. The full name of the regulations are The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 and have been introduced to comply with the European Energy Performance of Buildings Directive.

An Energy Performance Certificate (EPC) is intended to inform potential buyers or tenants about the energy performance of a building, so they can consider energy efficiency as part of their investment or business decision to buy or occupy that building.

An EPC will provide an energy rating for a building which is based on the performance potential of the building itself (the fabric) and its services (such as heating, ventilation and lighting). The energy rating given on the certificate will provide a rating of the energy efficiency and carbon emissions of premises from A to G, where A is very efficient and G is very inefficient. The ratings will reflect the amount of energy used in the premises and the carbon dioxide emissions. The certificate is also accompanied by a recommendation report that contains cost effective recommendations to improve the energy rating of the premises, together with an indication of the payback period. There is no obligation to comply with the recommendations.

The timetable for having to comply with the regulations and when an EPC will be required for most commercial premises in England and Wales is:

From 6 April 2008 those buildings with a total useful floor area greater than 10,000m* will require an EPC on construction, sale or let.

From 1 July 2008 those buildings with a total useful floor area greater than 2,500m* will require an EPC on construction, sale or let.

From 1 October 2008, all remaining buildings that are not dwellings will require an EPC on construction, sale or let.

* For the purposes of the Regulations, the building size to be considered will be the size of any part designed or altered to be used separately that contains the area being sold or let.”

One reason for the staggered introduction of the regulations is to enable sufficient numbers of energy assessors to be trained and accredited.

EPCs for the sale or letting of buildings other than dwellings will be valid for 10 years.

An EPC and recommendation report will have to be provided, free of charge:

• By the builder of new premises to the owners;



• By the seller of premises (whether freehold or leasehold) to prospective purchasers; and



• By the landlord of premises to prospective tenants (including on lease renewal).

The EPC and report (or a copy) must be provided at the earliest opportunity, and no later than:

• When any written information about the premises is provided in response to a request for information received from the prospective buyer;



• When a viewing is conducted or;



• If neither of those occur, before entering into a contract to sell or let.