Will new appeals system help prevent unfair business rates?

The business rates appeals process proposal, which is part of the Enterprise Bill, completed a consultation stage yesterday.

Check, challenge, appeal

It involves a new system with three stages – check, challenge and appeal. 'Check' involves a top-line look at how the rateable value is calculated and allows businesses to point out obvious errors.

The 'challenge' stage involves a more detailed dialogue with the Valuation Office Agency (VOA) on contentious points, which then makes a judgment. The final stage allows a business to make an appeal against this judgment to the Valuation Tribunal.

The British Beer and Pub Association (BBPA) and Association of Licensed Multiple Retailers (ALMR) are keen to see the appeals system streamlined but both have concerns about the new plan.

Transparency

The industry bodies stress the importance that the VOA makes enough information available to publicans on their valuation.

Both fear the system may be too complicated, and the ALMR says the system could be time-consuming and benefit nobody if transparency is not guaranteed early in the process.

The ALMR is also concerned the proposed system may delay further root and branch reform, while the BBPA supports the possibility of a refundable fee to reduce spurious claims – which must be capped at a "reasonable level".

A step in the right direction

BBPA chief executive Brigid Simmonds said: "These proposals are a firm step in the right direction. We have long called for changes to make it easier for publicans to appeal their valuations.

"It is one part of the jigsaw in what is much needed reform of the rates system, and we will continue to work for an effective revaluation in 2017, and encourage local councils to help pubs by cutting their rates burden, as well as calling for new ways of spreading the burden fairly among other businesses."

Both industry bodies have campaigned for reform due to 'unacceptable' delays in addressing incorrect evaluations.

Once-in-a-generation reform?

ALMR chief executive Kate Nicholls said: "We are pleased to see the Government addressing the issue of reform in this area but we are also worried that the focus may be drifting away from the once-in-a-generation reform the Government has promised."

The ALMR's Benchmarking Report​ shows overheads rose by 18% during the past decade. The average pub currently pays just under £15,000, with nightclubs paying more than £26,000.

Nicholls continued: "Reforming the appeal system is a small step on the way to change but we need to ensure the focus remains on larger scale, meaningful reform.

"We are also concerned that the new system, which seems to place the burden of proof on the occupier, will add complexity to an already convoluted system. Evidence used to determine 'fair maintainable trade' is not disclosed in the first instance to the businesses in question, and the new proposals do not oblige the VOA to provide this at the check stage.

"There is a real danger that, unless transparency is provided earlier in the process, the Government may find itself dealing with numerous, time-consuming appeals that make life easier for nobody."

Full disclosure

The ALMR urges that any reform to the appeals system needs to give full disclosure of the rental valuation at the earliest opportunity.

"Only then will it help reduce administrative burdens for businesses," Nicholls added.

"The first steps on the road to reform show the Government is listening, but meaningful, root and branch reform must follow quickly."