The Government review is set to take place at the end of October but Colliers said it will have consequences that should “certainly raise a red flag”.
Colliers has issued concerns across several facets of the review, including the measures to enable more frequent revaluations. It said while business rates experts welcome the Government’s commitment to more frequent revaluations from 2023 as it moves to a three-yearly revaluation cycle, the trade-offs, enabling the Valuation Office Agency (VOA) to undertake the work in a shorter time scale, will be reduced appeal rights and increased administrative responsibilities on ratepayers.
It added the ratepayer will have to provide not only confirmation of physical details on an annual basis but updates on rent and lease information as well as trading information even when there have been no changes.
Colliers head of business rates John Webber said: “This will pass a significant bureaucratic burden onto the ratepayer, which we believe is neither needed nor healthy for UK plc.
“Currently out of approximately 1.9 million ratepayers, 700,000 pay no business rates. These changes will therefore result in these 700,000 ratepayers being required to send one or more pieces of information annually to the VOA, involving them in a bureaucratic exercise where their information is unlikely to be used. This will have no effect on the amount of rates collected. At a time when business is supposedly being relieved of red tape in a post-Brexit world, the government seems to be proposing the opposite.”
Other concerns in this remit include the VOA wasting time wading through this information instead of getting the values correct or dealing with appeals in a timely way; sanctions and penalties that will be imposed should ratepayers either not return the information or do so outside of a time period; a late or no return of any annual request could result in a knockout of any appeal; little indication from the Government to impose similar time deadlines on the VOA; and a lack of transparency at the VOA.
Colliers also cited improvement relief as an area of concern. It said although it sees the Government setting out how it will introduce improvement relief targeted at qualifying works that ratepayers carry out to their premises as a step in the right direction, it has doubts about the extent of this relief, particularly as developers and landlords are exempted from it.
When it comes to support for investment in green plant and machinery, Colliers believes the recommendations should go further than introducing several green measures to exempt plant and machinery used in on-site renewable energy generation and electricity storage.
Meanwhile, the Government has also proposed several relatively minor administrative changes that seem of little consequence but sees issues if the Government decides to make it easier for the VOA to change the valuation approach to certain hereditaments and create a back doorway of raising more revenue.
Webber concluded: “Overall, the Government’s failure to deliver the much-needed fundamental business rates reform last autumn and replacing it with this consultation is desperately disappointing. We urge all interested parties to let the government know this and to respond before the consultation ends next week or they could find themselves snarled up with extra expense and administration.”