'Wartime footing’ as business rates appeals soar

By Emily Hawkins contact

- Last updated on GMT

Action needed: the Valuation Office Agency (VOA) has been urged to negotiate fair reductions with ratepayers
Action needed: the Valuation Office Agency (VOA) has been urged to negotiate fair reductions with ratepayers

Related tags: Property, Legislation, Coronavirus, Business rates, Valuation office agency

The Valuation Office Agency (VOA) has revealed that almost 145,000 businesses registered to begin the process of challenging their property valuations during April, May and June.

Some 144,910 shops, pubs, restaurants, offices, factories and public sector buildings, lodged a check - under the check and challenge business rates appeal process - during the three months when the UK was facing tough restrictions amid the coronavirus pandemic.

This marks an increase of 690% on the comparable period, with 18,340 checks raised between 1 April and 30 June 2019. 

There have now been 303,820 checks registered with 69,480 unresolved.

The number of new checks registered in July is also expected to be high. 

Changing circumstances

John Webber, head of business rates at real estate company Colliers International, said: “Covid-19 has led to the biggest Material Change of Circumstance (MCC) the country has seen in rating history and the system has been around for over 400 years. You could say we are on a wartime footing.”

He added: "Businesses are claiming MCC either as a result of the impact of the initial lockdown and/or on the impact to businesses as they have reopened.

"With social distancing and consumer and worker fears about returning to the shops or offices to work, few businesses in the country are operating on pre-Covid levels. There is no doubt that their circumstances have changed materially. Footfall has reduced massively, and many offices, shops and restaurants remain closed or on reduced capacity – these are all valid reasons to reduce the rating assessments.”

The Government will carry out a business rates review by the end of September and confirmed it would be delaying the next revelation of non-domestic property in England. It was set to take effect on 1 April 2021 but will now take effect on 1 April 2023.

Pubs have also been given a business rates holiday until March 2021. 

Webber urged quick action on the matter as the clock was ticking for the future of many businesses.

Bloodbath to come

Webber said: “We urge for a collaborative approach with the VOA getting together with the ratepayers and their agents as soon as possible to agree sensible and fair reductions across the board to those sectors most impacted. This will be essential if businesses are to plan ahead and hopefully work through this crisis.”

“We cannot leave things to chance – or we will see more closures and job losses. The bloodbath has only just begun.”

This sentiment was shared by Alex Probyn, UK president of the real estate adviser Altus Group, who said time was of the essence.

He said: “The impacts of Covid-19 on property are already obvious arising from the national restrictive measures introduced to counter the pandemic and grounds exist to support a substantial and prolonged reduction.”

"The effects of the pandemic within the tax base must now be reflected quickly as the changes are so fundamental, uniform and wide ranging.”

Related topics: Property law

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