Making Business Rate Valuations for Parking More Transparent

September 2023

A Case Study

Marriage’s County Stores, who sell animal feed, and B&M Retail, who sell housewares and non-perishable foods, are both located in the Moulsham Mill area in Chelmsford.

B&M is a large retail store with mezzanine floor. It has 248 car parking bays. Marriage’s is a small shop in a converted house. It has around 7 parking bays.

Examination of the business rate entries shows that the Marriage’s store is recorded with 4 parking spaces included in their business rate. The rateable value is set at £165 per month.

The B&M store has a single rateable value for the retail footprint. There is no account, or at least no separate account, of the parking spaces provided by the store.

Why the Difference? 

The reason for the inconsistency in approach between the larger B&M and the much smaller Marriages stores is unclear. It may be the case that the parking rateable value is included within the overall higher rateable value applied to the B&M retail warehouse floor area. It appears that the Aldi store, on the southern side of the site to B&M, is also without any specific rateable value for its car parking.

So, the first issue arises around the different approach. This bundling charge doesn’t seem very transparent. Nor does it seem to make sense. It may be appropriate to bundle a rateable value up when there’s many very small items at hand, but when it is over 200 parking bays, that hardly seems minor. Third, what’s the incentive for either large site to reduce the parking provided and perhaps turn that land over to something without commercial value? Would they see a reduction in their rates? It would help the cause if businesses really could see the cost that on-site parking was having to their business, and if that cost was such that they actively looked at whether they needed it on a regular basis. Separating out the specific rateable value cost for parking, would be a good step in this direction.

Is the Data Accurate?

Marriages has 4 spaces included in its business rate. On site, there appears to be at least 7 parking spaces available.

Is the Rateable Charge Reasonable

The rateable value for Marriage’s 4 parking spaces is set at £600 per month. Otherwise £150 per space. The Baddow Road long stay surface car park, operated by the City Council, is immediately adjacent, and to the north of the site. The casual rate to park in this car park, is £7.50 per day, and applies seven days a week. Based on 25 commercial days in a month, this would be £187, not so far off the £150. A monthly season ticket, however, in the car park, would be only £87.50. 

Concluding Remarks

Overall, it’s unclear why the smaller retail unit has its business rates broken down by different uses, and parking spaces are separately specified, whereas the much larger units do not. It would also be of interest to know what process is used to assess what the rateable value of a parking space should be.