Publicans put off by lengthy business rates appeals
The number of business rates challenges made in England since April 2017 has fallen by 95% compared to the same period after the last revaluation in 2010.
In almost three years, only 22,020 appeals have been made with just 7,810 of these concluded by the Valuation Office Agency (VOA).
The ‘check, challenge, appeal’ (CCA) system was introduced in April 2017 and described by a recent Treasury committee report as still in its “beta mode” and causing unacceptable difficulties for businesses.
The Treasury committee report concluded the VOA must resolve outstanding appeals urgently because many pubs were failing to stay afloat as they waited for a rates reassessment.
Broken system
Christo Tofalli, who operates the Ye Olde Fighting Cocks pub in St Albans, Hertfordshire, and is also the vice chair of rates campaign Save St Albans Pubs, said many publicans feel their appeals are not even looked at.
He added: “If they had done the job properly we wouldn’t need an appeals department but because it was done incorrectly, it now has no resources.
“We have heard from publicans who have been applying for over two years and still not heard anything back or even looked at. That's just because the system is broken, we know where the problem lies.”
The closure of VOA offices across the country made it more likely for pubs to be issued with unfair rates assessments but, ultimately, the Government needed to overhaul the rates calculation process, Tofalli said.
He said: “You're going to see pubs dropping out of business like flies this winter. You look at Mothercare, the high street, the only thing left you have got is a few independent pubs, if we don't save them now that's it. They are gone forever.”
Nightmare for business
Kate Nicholls, chief executive of trade body UKHospitality (UKH), said the rates system disadvantaged hospitality businesses by more than £2bn and delays to appeals made it even harder for pubs to deal with.
She said: “The reforms to the appeals system were well-intentioned and was designed to reduce frivolous appeals. However, the new system was ill-prepared and ill-funded and created a nightmare for business.
“The complexity of the appeals system has deterred many hospitality businesses from seeking recourse, and saddled them with punitive rates bills.”
A new Government must prioritise an urgent overhaul of the appeals system which ensures the VOA is funded adequately, Nicholls added, ahead of a general election on 12 December 2019.
British Beer & Pub Association (BBPA) policy director Andy Tighe said although the CCA system was introduced to reduce speculative appeals “clogging up the system”, pub operators had been put off appealing.
He explained: “Unfortunately, the complexity, lengthy timescales between stages and costs that can be involved has deterred many publicans with unreasonable or incorrect valuations getting beyond stage one.
“This has led to many paying thousands of pounds more than they should pay or can afford to pay.
“This is not sustainable and so it is vital there is sufficient resource and expertise within the VOA to value pubs correctly.”
