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NEC ECC: Option B Recovery of business rates

+1 vote
The Contractor pays business rates on the site establishment (accommodation, stores and parking).  The land that he uses belongs to the Client who provides it free of charge.

For a compensation event that includes time effects, the PM asserts that business rates should be included in the SSCC People Overhead.  The Contractor asserts that business rates are a Defined Cost as he did not buy or rent the land consequently it is not covered by clause 41 bullet 2.

Who is correct?
asked Apr 19, 2018 in Compensation Events by MCH (210 points)  

1 Answer

+1 vote
Best answer
This looks very much like a payment to a public authority for a charge which they are authorised to make.  This being the case then it would be a separate Defined Cost and not covered by the People Overhead percentage.

The only issue would be the calculation of business rates, what period it actually applies to (usually the financial year) and how any rebates may or may not be applied for any change of use during the applicable period.  It would not simply be a case of dividing the total amount by 52 to generate a weekly cost.
answered Apr 23, 2018 by Andrew W-I (14,010 points)  
selected Apr 23, 2018 by Neil Earnshaw