Property consultants Bruton Knowles say businesses in the West Midlands should be ‘prepared for the worst’ when the Government publishes the new draft 2017 rating list in a few weeks.
The Valuation Office Agency (VOA), which is responsible for setting rateable values for every non-domestic property in England and Wales, is due to publish the draft list at the beginning of October, with the compiled list going live in April 2017.
But according to Adam Rock, partner and head of rating at the firm, as well as the prospect of increased business rates, ratepayers seeking to challenge their rateable value face an administrative nightmare under the new appeals system.
The new three-stage system – Check, Challenge, Appeal – was proposed by the Government in July following a consultation on business rates reform, but has been criticised by rating experts for being overly bureaucratic.
Adam said: “The Government’s decision to delay the 2015 revaluation means ratepayers in the West Midlands have been eagerly awaiting the publication of the new rateable value list for the opportunity to challenge any unfair or excessive assessments.
“Sadly, ratepayers now face the prospect of having to go through this onerous process of making an appeal. Instead of creating a fairer system for ratepayers, what the government has actually done is make it more difficult. The Government should be helping businesses, not hindering them.”
The first stage of the proposed appeals process, ‘Checking’, involves reviewing factual information, including rents and floor areas, with the Valuation Office. This step could take 12 months and there is a risk of a fine for supplying false information.
The ‘Challenge’ stage places the burden of proof on the ratepayer to prove that the rateable value is incorrect. The Valuation Office will not reveal its evidence or justification, with ratepayers expected to obtain and supply all relevant evidence.
If after the challenge stage a satisfactory conclusion has still not been reached, the business can make a formal appeal against the rateable value. For the first time, a charge up to £300 may be applied for the right to launch an appeal to the Valuation Tribunal.
“In the small print is hidden one of the most worrying proposals in that the Valuation Tribunal will not amend the rateable value unless it is ‘outside the bounds of reasonable judgement’,” said Adam.
“What this means is that the Valuation Office has been granted a de facto margin of error and the margin could be as much as 20 per cent. This has far reaching implications and totally unbalances the appeals process.
“With the odds now stacked against the ratepayer, the new system is a blatant attempt by government to ride roughshod over the rights of ratepayers to ensure they do not pay excessive local taxes.
“It is an overreaction to the genuine issue of the volume of appeals submitted against the 2010 rating list by some firms, many of which had no chance of success. Often charging excessive fees, these appeals have clogged up the system and forced government to penalise all ratepayers.
“Bruton Knowles supports a fair business rates system and believes in providing ratepayers with accurate advice to reduce excessive business rates bills.”