The Rating team at CBRE Manchester reveals a lack of support towards the Government’s planned reforms to the business rates appeal system due to start in 2017. Responses to the changes outlined in the consultation paper ‘Check, Challenge, Appeal’, lead CBRE to question whether the proposed solution will address the fundamental problem with the current system which is too slow, lacks transparency and is causing uncertainty for businesses and billing authorities.
The Government proposes a new 3 stage process. The first of the three stages, the “Check” stage, will require the ratepayer to confirm whether factual information held by the Valuation Officer Agency (VOA) regarding the property is correct. The VOA will have up to 12 months to respond before the ratepayer can move to the “Challenge” stage.
The “Challenge” stage will require the ratepayer to provide detailed reasons along with supporting evidence as to why they believe the assessment is not correct. The VOA will have up to 18 months to issue their decision before the ratepayer can then appeal the decision to the Valuation Tribunal for England by moving to the “appeal” stage. The appeal stage will be subject to an appeal fee of between £100 and £300, or a fee linked to the rateable value of the property, refundable if the appeal is successful.
David Vernon, Director in the Rating team at CBRE Manchester said:
“The Government’s rationale for reforming the appeal system is to help businesses better understand how their properties have been valued and to introduce a more transparent system that is quicker to put things right where valuations are not correct. Unfortunately, the proposed changes are unlikely to achieve these laudable objectives and are more likely to have exactly the opposite effect.
“Replacing the current two stage system with an extra “Check” stage will inevitably result in a slower system since the VOA will have 12 months’ to respond to this initial stage. There is no reason why any factual inaccuracies cannot be dealt with during the “Challenge” stage. But perhaps more importantly, the proposed changes do nothing to address the fundamental problem which has clogged up the system with thousands of appeals. This is because the VOA will be under no obligation to disclose rental evidence at the “Check” or ‘”Challenge” stage if they consider it to be ‘commercially sensitive’. It is therefore disingenuous for the Government to suggest that the proposed reforms will enable businesses to ‘have a better understanding of how their properties will be valued’.”
Vernon claims that the introduction of appeal fees and civil penalties for providing false information (“knowingly, recklessly or carelessly”) is an unnecessary draconian measure that is more about deterring ratepayers from making appeals rather than introducing a ‘transparent approach’. He questions whether it is right for ratepayers to be forced down the path of the “Appeal” stage without the VOA being under an obligation to disclose rental evidence at an earlier stage?
Vernon continues; “It is clear the proposed reforms are very one-sided and not in the rate payers interest. If the Government is really concerned about introducing a fairer system that adopts a transparent approach and is quicker to rectify incorrect valuations, it is essential that rental information is given upfront. Failure to do this will leave a system that remains deficient, cumbersome and unjust.
“Will common sense prevail? Let us hope the Enterprise Bill currently going through the House of Lords is amended to include the ratepayer as a qualifying person to information determining the amount of tax they pay on their property. Only time will tell but we could end up with yet another Government reform with unintended consequences.”
