Businesses 'still can’t navigate new rates system'

By Stuart Stone contact

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One year on: VOA has released figures for the first year of Check Challenge Appeal
One year on: VOA has released figures for the first year of Check Challenge Appeal
The Valuation Office Agency (VOA) has released statistics shedding light on the impact of Check Challenge Appeal (CCA) in the first year since the new system for business rates appeals was introduced in April 2017.

The VOA revealed that one year on, since the introduction of CCA, only 23,770 'checks' have been made – the first of three stages when appealing business rates, which is followed by 'challenge' and 'appeal' processes.

This can be compared to 234,210 appeals lodged after one year of the 2010 list, a decline of 90% 'list on list'.

This means only 1.3% of the 1.85m rateable properties in England have been contested in the year to 31 March 2018.

The VOA also revealed there have been 18,400 checks settled after one year of CCA compared to 11,520 appeals settled on the 2010 list after one year – an increase of 60%.

Moreover, of the 18,400 checks settled, a total of 13,230 have been agreed or partially agreed, a success rate overall of 72%.

Full figures can be found here.

System not working as intended

Alex Probyn, president of UK expert services at Altus Group, said: “A key intention of Check Challenge Appeal was to create a more streamlined and modern system designed to deter speculative appeals.

“In doing so, it was bound to cause dissatisfaction among those who felt deterred, but I think all stakeholders understand this isn’t working as well as intended.

“We are working with the VOA and Government to make further improvements to the system.

“There are still process challenges and legacy attitudes to overcome, but it is certainly possible to make it a change for the better in the long term.

“Secondary legislation will be brought forward to allow the new appeals procedure to be used by those affected by the ‘staircase tax’ under the 2010 rating list.

“We remain concerned that the system might find it hard to respond to the influx in appeals that this essential correction will trigger.”

Hardly anyone contesting

John Webber, head of business rating at Colliers International revealed: “It beggars belief that businesses are so happy with their rates bills in 2017 that hardly any one is contesting.

“It is pretty obvious that the figures are so low purely because, despite claims otherwise, ratepayers still can’t navigate through the new system.

“When the Government introduced its new CCA appeals system on the same day as the new Rating List, we and other experts had warned that it was unworkable at the time.

“Since then, businesses have been really struggling to get registered; and even to claim that they are the ratepayer is a further hurdle.

“And that is before they get to the start of the check stage – a three-part appeal process, which many find unworkable and ‘not fit for purpose’.

“Clients have been coming to us for advice as to what to do.”

Nightmare 'hospital pass'

In April, Colliers lodged a freedom of information request to the VOA concerning CCA.

Webber explained: “The FOI request revealed almost 90% of over 2,000 respondents were dissatisfied with the new system.

“We get requests for help every day – ratepayers are tearing their hair out.

“Since the new Rating List was introduced in April 2017, we have seen unprecedented carnage on the high street, with around 20 retailers or casual-dining groups moving into CVA or administration, including household names like House of Fraser and Mothercare.

“Business rates are obviously not alone in causing their plight, but they do play a part, particularly if businesses can’t access a decent appeal system to get their concerns heard. 

“And it’s not just retailers – businesses of all sizes are suffering too. It’s interesting that even the governor of the Bank of England, Mark Carney, is now saying something must be done.”

“Every day we see examples of businesses that are in trouble. Business rates now represent a property tax of 50p in the pound.

“If the Government is going to maintain such high taxes, it must at least give businesses a system that gives them a chance for a proper appeal and one that is transparent – not this nightmare 'hospital pass'."

Related topics: Property law

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