Business Rate Appeals
The Business Rate Appeal System has been reformed around an initial “check and challenge” stage to the Valuation Office Agency (VOA) before proceeding with an ‘Appeal’. Draft Assessments were published on 30th September 2016.
The ‘Check Stage’ will ensure the property’s rating assessment is based on accurate and up to date facts and the ‘Challenge Stage’ will allow the ratepayer to challenge the assessment whereby the VOA will consider and issue a decision on whether the assessment can be altered. Only then will the ratepayer be able to appeal his assessment to the independent Valuation Tribunal.
Further changes include ratepayers being charged an upfront fee to proceed to the ‘Appeal Stage’.
The key driver for Government appears to require a system which works more efficiently so that the cost can be reduced. However, at the same time, the rating system should provide an easy to use and prompt opportunity for ratepayers to understand their Rateable Value and to check and challenge it if necessary with alterations concluded as quickly as possible.
What is most essential is that the relevant rental evidence upon which assessments are based is provided in the public domain. However, the burden of proof is now on the ratepayer to provide all necessary information.
Given that there is a growing consensus that the life of a Rating List should be shortened with revaluations every 3 years rather than 5 or 7 years as was the last case, the current proposals will potentially lead to unacceptable delays whereby the ratepayer will not be able to proceed from the ‘Check’ to the ‘Challenge’ stage for at least 12 months, where after the VOA are able to take a further 12 months to respond before an appeal can be submitted to the Valuation Tribunal. If 3 yearly revaluations were introduced to reduce the variations in the property market this could potentially result in a situation where very few appeals are settled before the next Rating List is to be implemented!!
The ‘Check Stage’ may also further encourage unqualified advisors who will charge an upfront fee for carrying out a “Check”, of no more than logging in to the Government web portal and reporting that “the assessment is correct”. Further insult would then be added that under the proposals, the right to make a subsequent ‘Check’ and ‘Challenge will have been lost by the actions of the unqualified advisor.
The changes also include charging an ‘appeal fee’ of approximately £300 which although can be refunded for successful appeals is unclear on refunds for partially successful appeals and also does not cover any additional costs incurred by the ratepayer. This will form a disincentive, particularly for small individual ratepayers who will have to commission and pay for a full survey and valuation adding further delay to the appeal process. The changes in the system makes the rating appeal system even more difficult and costly albeit discouraging the number of spurious appeals submitted. If there is a genuine desire to deal with the issues before an appeal, the VOA will need to provide the necessary rental information at the ‘Check Stage’ and also receive an increase in its current resources to enable it to respond to ratepayers during the ‘Check’ and ‘Challenge’ stages. In our opinion, if the VOA provide the evidence at the initial ‘Check Stage’ then appeals will lessen considerably as a consequence.
2017 Business Rates Revaluation
The VOA have completed the revaluation of over 1.8 million commercial properties across England and Wales to be effective from 1st April 2017 and ‘draft’ assessments were published on 30th September 2016.
The last revaluation undertaken was in 2010 based on rental information in 2008. A lot has changed since then including the UK entering into a double dip recession and more recently a significant improvement in the commercial property market.
As a result, there have been diverse changes in property values across all sectors during this time which will potentially lead to errors and inaccuracy by the VOA when determining ratepayer’s new assessments. Consequently, we believe there is considerable scope for appealing and reducing ratepayer’s rate liability going forward.
Ratepayers need to be aware of the following ‘key dates’ in the lead up to 1st April 2017.
30 September 2016
The draft 2017 Rating List is published ‘on line’ when assessments should be checked for any factorial errors.
Uniform Business Rate Multiplier to be confirmed.
Estimated 0.512 pence in the pound. Currently 0.497.
2016/2017 Business Rates Demands are issued to Ratepayers.
1 April 2017
The new Rating List comes into effect.
Check, Challenge and Appeal if necessary.
Business rates are a major occupational cost and yet surprisingly many ratepayers do not check the accuracy of their assessment. Furthermore, changes in the use of business premises and ever-changing complex legal legislation such as the Enterprise Bill will have a significant financial effect on business occupiers.
Our Specialist Rating Surveyor can advise on the merits of submitting an appeal against the assessment and will handle all necessary procedures on your behalf, including negotiating with the VOA and attending the Valuation Tribunal if necessary.
For more information, please use the “contact us” link.