28 February 2024


by: Admin


Categories: Legislation, Non-Domestic Rating, Reform, Regulations

Mezzanine Floors

When do rates apply?

Business rates in England are tax on the occupation of commercial property. They are charged on premises such as shops, offices, pubs, warehouses, factories and holiday rental homes. The ratable value of your property may change if you alter the size of your structure by adding an extension or alteration. Additionally the rates you pay on your building could change if you alter what your business uses the space for.

Adding a mezzanine floor to your warehouse can be a good move to optimise your available space efficiently. It can provide room for your growing business but can also offer potential cost-saving advantages. One key benefit is that depending on what you intend to use it for you may be exempt from paying rates on your mezzanine floor.

By incorporating a mezzanine floor, a business gains additional space without the often large expense of relocating to a new permanent unit or leasing off-site storage facilities. This cost-effective approach allows you to make the most out of your existing infrastructure, enhancing operational capabilities while keeping costs relatively low.

The impact on your business rates can vary depending on the nature of your mezzanine floor. If it’s designed to be lightweight, freestanding, and relocatable, it’s considered similar to pallet racking due to this your rates will typically remain unaffected, presenting a clear advantage. However, be aware that additional rates may be applied if it is not easily removable, re-erectable, or reusable.

Following a successful business rates appeal  in 2020, Amazon was to benefit from millions of pounds in business rates back from a council after a row over one of its warehouses.   The online shopping giant successfully appealed against the amount it was charged by Cannock Chase Council by arguing that mezzanine floors did not count as floor space.

It means the local authority will have to hand back something in the region of £3million – forcing it into financial hardship.   More information can be found here.