Delay to Covid-related appeals could be disastrous for UK businesses
Professional services and investment management company, Colliers, have voiced their dismay at negotiations with the Value Office Agency coming to a halt in what they describe as a “kick in the teeth ” for businesses.
Talks between the Government 's VOA and the RSASG (RSA covid-19 strategy group), the body set up to represent 85 per cent of the ratepayers with outstanding Covid-19 MCC (Material Change of Circumstances) business rates appeals, have come to an abrupt halt with no indication as to when they will resume.
John Webber, head of the business rates team at Colliers and involved in the RSA 's negotiations with the VOA, has labelled the decision as disastrous and believes it to be the decision of Chancellor, Rishi Sunak.
According to Colliers, many businesses that occupy office space have been severely impacted by the impact of covid-19 and the various lockdowns.
Unlike businesses in other sectors, such as those in retail and leisure/hospitality, office based businesses have received no rates holiday and only the smallest businesses were able to benefit from the initial government grant schemes.
This is despite many office-based businesses seeing a massive disruption to their business operations due to the pandemic and lockdowns, with staff working from home and offices left largely unoccupied.
Many businesses have seen a significant drop in profitability. As a result, the number of businesses appealing their business rates on the grounds of Material Change of Circumstance is at its highest rate ever.
The latest published figures from the CCA figures reveal there were 289,510 checks (the first stage of the appeals process) between March and December 2020.
Colliers has said the number of businesses starting their appeals has rocketed further since the New Year and estimates the number of outstanding covid-19 checks (the first step in the appeals process) is now around 350,000.
John Webber (pictured) said: “The RSASG and the VOA had been discussing what should be done about the hundreds of thousands of businesses lodging an MCC since March last year and, given the pressures on the current appeals system, the most sensible and efficient thing to do would have been to grant such businesses a blanket percentage reduction on their rates bills for 2020/21.
“This would prevent what could be years of uncertainty whilst the VOA worked through the backlog.
“It is outrageous that whilst jobs are being lost by the hour and businesses prevented from occupying office space in towns and cities up and down the land, that the Chancellor effectively called a halt to discussions between the VOA with agents representing small and medium sized businesses at Christmas.
“In these talks the VOA had tabled an initial offer of a 25 per cent reduction in business rates which should have risen to 75 per cent - but the offer was withdrawn as soon as it came to public attention and before it could be properly accepted. ”
Webber concluded: “Around 350,000 businesses must now go through the CCA system to register their displeasure of having to pay business rates on property they have all but been able to occupy for 12 months. Amongst these are businesses who desperately need financial support if they are to survive into the Spring. ”
“The RSA represents 85 per cent of those ratepayers with outstanding covid-19 checks and we have been working hard to find some solution to their problems quickly.
“For the VOA to be instructed that it should not resume negotiations or to engage with us in a constructive manner, it could sound the death bell for many firms that have been hanging on in the hope for a reprieve on their business rates.
“We urge the Chancellor to direct the VOA to re-enter negotiations with us, or to come clean and explain why it won 't. Our clients deserve more consideration than to be left out to dry for an extra three months in this way. ”