Rates, Service Charges & Insurance
Property is likely to be one of the highest costs to your business, but it is essential to have accommodation! When you take on a property there are a number of costs you will need to factor in to your business plan so you can budget for the year.

1) Rent
2) Service Charge
3) Insurance
4) Information Gathering
5) Business Rates

1) Rent
All IPIF estates are Registered for VAT so you will need to add VAT at the prevailing rate onto the quoted rent for the amount payable.

2) Service Charge
We actively manage all of our estates and each tenant pays a pro-rata service charge for a variety of benefits and items necessary for the safe and effective running of the estate. These can include litter picking, security, landscaping, and rubbish collection. We will provide you with details of the charge for your unit for the year and what it is you are paying for. VAT is also payable on the service charge.

3) Insurance
IPIF has all of their estates insured by AXA. The Fund pays the insurance premium for the whole estate and charges the individual tenants back for the insurance cost of each unit.

4) Information Gathering
Due to the new Money Laundering Regulations, and because we do not necessarily know who you are we will ask you for a bit more information.
We require details from you of how you propose to use your unit so that we can obtain a quote from AXA and once we have this you will be provided with details of the quote.
The general rule for IPIF, and most commercial Landlords, is that your post tax profits must equal or exceed for 3 consecutive years the combined total annual rent, rates and service charge OR the net asset value of your company must equal or exceed 5 times the annual rent, rates and service charge for the unit you wish to let.
However a full financial appraisal will be carried out by Legal & General and we will confirm whether additional information is required or if we are able to proceed.
When you have occupied, AXA will carry out an insurance survey, usually once a year, to check you are using the premises as you stated so they can check the quote they have provided is correct. The quote may be subject to change if the survey reveals that the unit is not being used as you have stated.

5) Business Rates
Every 5 years a government agency called the Valuation Office revalue all commercial property in the UK. The latest revaluation was in 2005. It is obligatory to pay them Business Rates for occupying commercial property be this an office, a shop or a warehouse. We will provide you with details of the current Rateable Value (RV) together with the current Uniform Business Rate (UBR). The UBR is the multiplier that gives you an indication of the likely rates payable for your unit.
For 2008/9 the UBR is 46.2p in the £.
E.g. 2005 RV - £25,430 x UBR 46.6p = £11,748.66
So your likely Rates Payable for the unit would be £11,748.66 for the coming year.

*Tenants should make their own enquiries with the Business Rates department at the Local Council or look on the Valuation Office website.