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Business rates appeal process continues to fall short of expectations

Marketing / 13 Apr, 19

In the 12 months since last year’s business rates revaluation the number of business that have appealed their business rates assessments has fallen by a massive 89%.

Figures released last week showed that only 23,770 businesses had served Checks on the Valuation Office Agency (VOA) in the period April 2017 to March 2018, contrasting with 222,000 appeals served in the year following the 2010 revaluation.

Owing to a seven-year Rating List, implemented by the coalition government of 2013, the 2017 business rates revaluation led to thousands of businesses receiving increased rating assessments of greater than 50% and a package of relief that was inadequate and unfair for many. Despite this and the fact excessive business rates are regularly cited as being a major contributing factor to failing high streets and difficulties in the leisure sector, it is staggering that only 1.3% of rateable values (RVs) have been challenged.

Rob Cohen, Partner in our Rating team commented, “The drop in the number of businesses contesting their rateable value cannot be attributed to businesses accepting their bills as some in Government may contend but is down to the overly complex Check Challenge Appeal process (CCA) that was introduced alongside the 2017 Revaluation.

“It was not long ago that the government released figures showing that 90% of users are currently dissatisfied with the new CCA process and these figures coupled with the huge decline in businesses contesting their RVs are difficult to ignore. They point to a system that has failed to deliver what it set out to and the system that should be delivered as part of a fair and transparent taxation system in a developed country. The reforms made by the Government to the appeal system last year were poorly construed and poorly implemented and, if they are to avoid continued criticism and potentially judicial reviews on matters, HMRC needs to make significant changes to make the system more user friendly, remove red tape and release their staff of bureaucracy and targets that make it difficult for them to perform their duties.”

Graham Isle, Partner, also commented, “The extra burdens placed on ratepayers in challenging their rate assessments has resulted in a significant delay in the majority of ratepayers commencing the process, and even when the process has commenced, it could in some circumstances take up to 30 months before an appeal to an independent tribunal can be made. The whole process has led to further financial pressures for companies, especially in the retail and service sector. This can be evidenced by the number of recently approved compulsory voluntary arrangements entered into and store closures which ultimately lead to job losses.”

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