ATED valuations in London: comply with the law and minimise your tax contributions

If your company owns residential property valued at over £500,000 in London, you’ll likely need to pay Annual Tax on Enveloped Dwellings. Failure to submit your ATED return could result in a penalty, and you must obtain an accurate property valuation every five years to calculate how much tax you owe. Fortunately, our RICS registered valuers can help you reduce your tax bill, comply with the law and avoid making punishable errors when submitting your ATED returns.

Annual tax on enveloped dwellings (ATED) explained

The government levies ATED on properties that fall under the ‘dwellings’ category, which means any property that can be partly or entirely used for residential purposes.

Properties that aren’t classified as dwellings under the ATED scheme include:

  • Guest houses
  • Hotels
  • Hospitals
  • Boarding school accommodation
  • Military accommodation
  • Student halls
  • Prisons
  • Care homes

In April 2016, the ATED scheme was updated to include any dwelling valued at over £500,000 and owned by a company, in partnership with a company or under a collective investment scheme. If you think your property’s value may exceed £500,000, you need a market valuation from a RICS registered valuer.

How much ATED do I need to pay on a London property?

ATED fees for the year beginning 1st April 2017:

Property ValueATED fee
£500,000 to £1 million£3,500
£1 million to £2 million£7,050
£2 million to £5 million£23,550
£5 million to £10 million£54,950
£10 million to £20 million£110,100
£20 million or more£220,350

Why do I need an ATED valuation?

Your property’s value determines how much ATED you’ll pay annually for the next five years. After five years, you’ll require another valuation to comply with the law. If you haven’t had your property professionally valued since 2013, you’ll need a RICS valuation to calculate your ATED fees for the 2018 tax year. Fortunately, complying with the law isn’t the only benefit of an ATED valuation.

The benefits of ATED valuations for London properties

ATED valuations are more than just a necessity because they can help you:

  • Avoid Penalties
    Ensure inaccurate valuations don’t result in a financial penalty.
  • Minimise Your ATED Fees
    Find out which tax reliefs and exemptions apply to you.
  • Prevent Delays
    Don’t let application errors interfere with the day-to-day running of your business.
  • Budget Your Capital Accordingly
    Learn how much ATED you’ll have to pay for the next five years.

Are ATED valuations a worthwhile investment?

From as little as a few hundred pounds, you can obtain an ATED valuation that could help you significantly reduce your annual tax bill for the next five years, avoid potentially costly penalties and raise disputes to the district valuer if necessary.
Contact London’s independent RICS registered valuers at Harding Chartered Surveyors today on 020 3598 6730 to learn more about ATED or to book a valuation. If you need an in-depth report on your property’s condition, obtain a free quote for a building survey or read about the various options available.

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