Colliers urges all rate payers to push back on business rates consultation
The government’s latest proposals on business rates may create more difficulties for businesses appealing their business rates than benefits, according to rating experts at property consultancy Colliers.
The government consultation, which requires responses by 24 August, states that three yearly revaluations will provide more accurate valuations and greater transparency about the make-up of valuations, enabling business rates liabilities to more closely reflect current rents and economic conditions.
Whilst Colliers supports the move to three-yearly valuations, it has noted some concerns that the government is not prioritising increasing the resources at the Valuation Office Agency to achieve this, resulting in a system which may put even more burden on ratepaying businesses.
The consultation paper is asking for responses and comments on the following matters:
- Duty to notify the VOA of changes to the occupier and property characteristics, information which would be shared with the billing authorities.
- Mandatory provision of rent and lease information as well as trade and cost information used for valuations.
The government is also proposing changes to the current appeals system:
- The Check stage would be removed on the basis that this would be covered by the Duty to Notify.
- There may be a fee for submitting a Challenge, in addition to the current fee for submitting an Appeal.
- Landlords could not submit an appeal where they are not the rateable occupier.
- The ratepayer can apply for a fuller analysis of rental evidence used, but this must be prior to the Challenge being submitted
According to John Webber, Head of Business Rates at Colliers, the proposals would result in a much more onerous and expensive way for businesses to appeal their business rates. In its response to the consultation, Colliers has highlighted the following flaws in the proposed system:
Duty to notify. This is a significant burden on ratepayers as it will now involve an annual confirmation return. This is effectively an annual check by ratepayers.
Mandatory provision of lease information. An annual return to include side letters and arrangements agreed with landlords. This is required by the VOA even though they already have access to this through land registry and other sources.
Restrictions on appeal timescales. The government has announced that the draft list will be published 3 months before it becomes live and not the usual 6 months. This leaves little time to review valuations and submit Challenges upon receipt of the draft list values.
Fees for a challenge with refunds upon success. This could cause cash flow issues and will reduce access to justice.
Backlog. The huge backlog of 2017 appeals mean that it is unlikely that these will be cleared prior to the new list and new process being put in place.
Timescale. Based on experience, Colliers thinks that it is unlikely that all Challenges will be able to be cleared within three years. The onus is put on the ratepayer to provide all evidence and information, yet the VOA’s statutory response deadline is later than it is in the current list.
John Webber comments, “The Government introduced the current Check Challenge Appeal system without proper consultation with the industry and without prior testing. The frustrations with that system are well chronicled. This has all the hallmarks of a similar mess.
“This new system would increase the bar to appeal against unfair rating assessments and thus reduce the number of appeals. The VOA will have no need to inspect properties or maintain the list- that responsibility seems to have passed to every ratepayer in the country. If the proposals go ahead as in current form, the VOA will think it is Christmas.”
“It’s interesting the proposals have been rushed out at the start of the Summer holidays as businesses struggle with trying to return to normality and the pingdemic of staff following the COVID lockdown. However, despite the inconvenience, we urge all businesses to make representation to this consultation by 24 August – or their ability to appeal higher and higher rate bills will be severely curtailed.”