Goalposts moved for firms paying rate bills near Paradise Circus - claim

The Valuation Agency Office (VOA) has been accused of using a technical argument to refuse to sufficiently increase the business rates rebate for firms in the vicinity of the Paradise Circus Redevelopment - despite further disruption caused by the new tram works.

According to business rates experts at Colliers, the 148 businesses around the redevelopment have been entitled to a rebate off their rates bills due to the disruption to their business caused by the redevelopment, since it began in 2015.

This is under the grounds of an MCC - material change of circumstance - impacting the normal working environment of the businesses in the area, with building works on-going.

Colliers say the impact on values caused by such disruption should be measured every day - but given this is not practical on a day-to-day basis, the VOA have up to now agreed to a 15 per cent “blended ” rebate for businesses for the duration of the works, which would average out to be a fair rebate over the period of redevelopment as a whole.

In 2017 works started to extend the tram from Birmingham city centre past Paradise Circus and up to Broad Street - a major project causing significant disruption and thereby creating an additional problem and a further MCC for businesses nearby.

However, rather than agreeing to increase the 15 per cent blended rebate to compensate for this additional disruption, Colliers says the VOA has ignored the previously agreed blended allowance and ripped up the 15 per cent agreement.

The VOA, having taken a case to Valuation Tribunal, is now agreeing to a reduced 7.5 per cent rebate for the Paradise works (previously 15 per cent) and to add 12.5 per cent for the disruption caused by tram works. This results in a total rebate of 20 per cent, as opposed to the 27.5 per cent for both.

Colliers say 148 businesses have been impacted by this action, who together pay rate bills of around £2.4million.

The real estate experts estimate this is costing such businesses an extra c £400,000 than if the VOA had continued to apply the blended allowance for the redevelopment disruption.

John Webber (pictured), head of business rates at Colliers, said: “The VOA is reneging on its agreement to use a blended allowance through the whole period of the redevelopment.

“Without a blended rate to average things out, businesses would have received a higher rebate off their rate bills earlier in the redevelopment when disruption was at its highest. We all agreed to work with the blended rate- so this move is changing the goal posts, retrospectively.

“The right thing to do would be to continue with the agreed 15 per cent blended rate until the end of the redevelopment and to add for the disruption caused by the tram works.

“It is shameful that public servants should think it is clever to give an allowance for the disruption caused by the tram works and then take away some of the allowance for the Paradise development works which had been previously agreed.

“These businesses have paid full rates throughout the pandemic and for the Government agency to play fast and loose with the rules is disgraceful. ”