Government plans for reforming business rates’ appeals will create a system that is “more confrontational, more litigious and more costly,” according to Colliers International, the global commercial real estate agency and consultancy, in a letter to Treasury officials.
It is understood that the Government is now analysing feedback following a two-month consultation on reforming the rates’ system, which it believes would make it “quicker, clearer and a more transparent service.” However, in a letter to Treasury officials, Colliers claimed that the proposed changes will severely reduce the rights of ratepayers to challenge their assessments.
Adam Burke, director rating at the North West offices of Colliers International in Manchester and Liverpool, commenting on the letter to Treasury officials, said: “With revaluations only every five years, we have clearly created a culture of appeals. We are calling on government to seriously consider three-yearly revaluation as a way of producing a more accurate rateable value, thereby suppressing the need to appeal.”
In addition, extra-funding is required for the Valuation Office Agency (VOA) in order to deal with the unacceptable backlog of appeals.
As of end of Q2 2015, the number of outstanding appeals for the Manchester City Council catchment stood at 6,570 – the fourth highest among local UK councils outside of London.
Burke continued: “Given there is in excess of 289,000 outstanding business rates’ appeals, it is in everyone’s best interests to reform the system. But what we mustn’t do is create a scheme which almost prevents a ratepayer from challenging an assessment.”
“Business needs certainty and deserves equality – two major planks of any system of taxation. Colliers’ proposals to move to three-yearly revaluation will reduce the level of appeals, while making it easier for legitimate challenges to business rates’ assessments to be dealt with more efficiently.”
In December 2015, Colliers published ‘Business Rates: How the 2017 Rating Revaluation will affect High Street Retailers’. This major study highlighted the likely effects of forthcoming business rates changes for retailers across the UK.
Colliers Manifesto for Business Rates Reform:
1. More frequent revaluations, three-yearly, at least, by 2023;
2. Increase funding for VOA in order to deal with existing appeals’ backlog;
3. Release VOA from pressure exerted by local councils and HM Treasury;
4. Introduce a register of appeals professionals – removing the ‘cowboy’ element;
5. Iron out inequalities where small business pays a higher proportion in business rates;
6. Root and branch reform of current business rates exemptions and reliefs.
