Today the Government’s Valuation Office Agency (VOA) revealed that one year on since introduction only 23,770 checks have been made which means only 1.3 % of the 1.85 million rateable properties in England have been contested in the year to 31st March 2018, following the 2017 Rating Revaluation becoming effective from 1 April 2017 despite this being the day the largest changes to business rates in a generation had been published.
As John Webber, Head of Business Rating at Colliers International said, “It beggars belief that businesses are so happy with their rate 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.”
The 2017 Rating List included significant business rate increases across London and the South East, with some ratepayers seeing 50% to 100% increases in their assessments, alongside a penal downward transitional scheme for the rest of the UK, that offered little respite to ratepayers in more depressed areas. Since then there has been outcry from industry bodies and individual businesses and retailers for relief from crippling business rates. Now the ability to appeal against the new rateable values continues to add insult to injury, as businesses are unable to navigate through the complicated* Government portal to challenge assessments.
Webber continued, “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.
In April, Colliers conducted a FOI Request to the VOA concerning CCA. “The FOI Request revealed nearly 90% of over 2000 respondents were dissatisfied with the new system.” said Webber. “We get requests for help every day - ratepayers are tearing their hair out.”
Webber compared this year’s number of appeals to those against the 2010 Rating List, which was by no means as controversial as in 2017. At the end of the first year of the 2010 Rating List there were 222,000 appeals against the new rating list and over the last seven years the VOA has received a total of 1,132,000 appeals and has been clearing these at a rate of about 128,000 a year, leaving around 133,000 claims still outstanding. “Given the numbers in 2010, I can’t believe 98.7% of businesses are so happy with their rating assessments in 2017 that hardly any one is appealing."
The appeal figures are also concerning when considering the VOA’s history of dealing with them:
“There are still over 133,000 appeals outstanding on the 2010 Rating List, and recent Upper Tribunal cases openly criticise the Valuation Tribunal (VT) and the VOA for unlawfully striking out appeals for minor procedural breaches. Published figures show that over 220,000 appeals were struck out on the 2010 Rating List, raising serious concerns as to how many of these have been struck out illegally and how many thousands of rate payers have been denied justice and more importantly millions of pounds in refunds. The system is just not fit for purpose and the impartiality of the Tribunal Service and the VOA is yet again called into question. It remains to be seen how any appeals against the 2017 list will fare- but the omens for success are not good.”
Webber admits that the VOA is saying it is trying to do something about the system. Planned improvements such as the development of API (how agents software and the VOA systems talk to each other) planned for July to September is welcome – but as Webber says, “It is not enough and it would be helpful if the VOA would indicate when they anticipate progression beyond this point.”
Similarly, the launch of Group Pre -Challenge Reviews (GPRCs) is a positive step, but, “The VOA will need to commit resource to ensure reviews are timetabled in a way that delivers agreed valuation schemes at pace. It is not the availability of the GPCR option from June that is critical, rather the availability of VO valuers to deliver the product to ratepayers.”
Webber concludes “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 £1. 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."