Rates proposals may cause difficulties for firms appealing - Colliers

The government 's latest proposals on business rates will create more difficulties for businesses appealing their business rates than benefits, according to rating experts at Colliers.

Colliers made the comments in response to a government consultation, which has taken place throughout the summer, in which the government stated that three yearly revaluations will provide more accurate valuations and greater transparency about the make-up of valuations.

While Colliers supports the move to three-yearly valuations, they are concerned that the government is not prioritising increasing the resources at the Valuation Office Agency (VOA).

According to Colliers, this may inevitably put even more burden on ratepaying businesses.

Government has also consulted on proposed changes on the duty to notify the VOA of changes to an occupier and property characteristics, which would be shared with billing authorities, and a mandatory provision of rent and lease as well as trade and cost information used for valuations.

Additionally, government is proposing changes to the current appeals system, including the 'check ' stage being removed, a possible fee for submitting a change, a draft rating list being issued before revaluation on 1 January 2022, and landlords being unable to submit an appeal where they are not the rateable occupier, among other changes.

According to John Webber (pictured), head of Business Rates at Colliers, the proposals would result in a much more onerous and expensive way for firms to appeal their business rates.

In its response to the consultation, Colliers has highlighted what it views as flaws in the proposed system:

• Duty to Notify. This is a significant burden on ratepayers as it will now involve an annual confirmation return. This is effectively an annual check by ratepayers - even those who may benefit from reliefs and don 't pay business rates- 600,000 businesses currently- increasing the paperwork and administration burden.
  
  
• Mandatory Provision of Lease Information. Again, an annual return to include side letters and arrangements agreed with landlords. This is required by the VOA even though they already have access to this through land registry and other sources. There may also be multiple rental returns required for each ratepayer based on frequent events being concluded throughout the year.
  
  
• Restrictions on appeal timescales. The government has already announced that the draft rating list will be published three months before it becomes live and not the usual six months. This proposal then suggests a three-month window to appeal. This leaves little time to review valuations and submit Challenges upon receipt of the draft list values.
  
  
• Fees for a challenge with refunds upon success. This could cause cash flow issues and will reduce access to justice. (Currently there are no fees payable until the final stage of CCA).
  
  
• Landlords restricted from submitting challenges. Although not of major concern to many, a lot of landlords take a proactive approach to the rates liability of their tenants. To remove their involvement in the process seems unnecessary as well as undemocratic.
  
  
• The death of MCCs. Set against the background of the government legislating to outlaw Covid MCC appeals perhaps it is not surprising that they are suggesting the removal of the ability to appeal on any MCC grounds. While this could be possible in an annual revaluation cycle, to remove it in a three-yearly cycle is again undemocratic and unjustified.
  
  
• The huge backlog of 2017 appeals mean that it is unlikely that these will be cleared prior to the new list and new process being put in place. Colliers are concerned that 2017 appeal rights could be cut off.

Colliers also think that it is unlikely that all challenges will be able to be cleared within three years.

Mr Webber commented: “The government introduced the current CCA system without proper consultation with the industry and without prior testing. The frustrations with that system are well chronicled. This has all the hallmarks of a similar mess.

“This new system would increase the bar to appeal against unfair rating assessments and thus reduce the number of appeals. The VOA will have no need to inspect properties or maintain the list- that responsibility seems to have passed to every ratepayer in the country. If the proposals go ahead as in current form, the VOA will think it is Christmas.

“It 's interesting the proposals have been rushed out at the start of the summer holidays as businesses struggle with trying to return to normality and the pingdemic of staff following the Covid lockdown. ”