Businesses have been totally let down by the new Business Rates Appeals system; Check, Challenge Appeal (CCA)- which is clearly not working, according to rating experts at Colliers International, the global commercial real estate agency and consultancy.
Today the Government’s Valuation Office Agency (VOA) revealed that only 5,650 (or 0.3%) of the1.85 million rateable properties in England) have been contested following the 1st April 2017 Listing, despite this being the day the largest changes to business rates in a generation had been published. The Government did not publish any figures on the number of cases that have made it to the appeal stage yet, but sources close to Colliers have suggested this figure is a paltry less than 3 cases.
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. We would argue the figures for 2017 are so low purely because ratepayers can’t navigate through the new system.”
Indeed the April 2017 Ratings list included significant rate increases across London and the South East, with some ratepayers seeing 50% to 100% on their rate bills, alongside a penal downward transitional scheme for the rest of the UK, that offered little respite to ratepayers in the depressed areas. Since then there have been calls from industry bodies and individual businesses and retailers for relief from crippling business rates. Now the ability to appeal against the new rateable values seems to have added insult to injury, as businesses are unable to navigate through the Government portal to challenge their assessments.
As John Webber, explains, “The Government introduced its new CCA Appeals system on the same day as the new Rating List despite the advice of rating experts who said 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 the Summer, Colliers conducted a FOI Request to the VOA concerning CCA. The new system requires ratepayers to check the information held on the property by the VOA as the first step in the process. Multiple properties held in a portfolio must each be claimed separately and the identity of the ratepayer must be proven with supporting documentation.
“The FOI Request revealed that 90% of the 850 respondents were dissatisfied with the new system and few felt it was working. There is no indication this percentage has decreased since," continued Webber, “We get requests for help every day.”
The England figures are particularly of concern, when compared with the Scottish and Welsh figures, where CCA has not been introduced. In Scotland, it was revealed last week that 29% of Scottish businesses appealed the 2017 Rating List assessments, representing a value of £5 billion. In Wales, 2% of rating assessments in the 2017 list are being appealed against. English figures should by rights dwarf the other two countries; there are 1.85 million rateable properties in England, compared to 245,000 in Scotland and 118,000 in Wales and, so it’s inconceivable that only 5,650 rating assessments are being contested in England, which represents 0.3% of the total.
Webber also compared this year’s number of appeals to those against the 2010 Rating List, which was by no means as controversial as in 2017. By the third quarter of 2010 there were 182,000 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 200,000 claims still outstanding. “Given the numbers in 2010, I can’t believe businesses are so happy with their rating assessments in 2017 that hardly any one is appealing."
““Dealing with CCA is like going to a hospital which is proud to proclaim that it has empty beds in its wards. In reality the hospital has locked and bolted its windows and doors, so the sick and weak can’t work out how to get in- they are having to go home to suffer or worse! “
Webber concluded, “We are everyday seeing examples of businesses that are in trouble, particularly in the retail and pub sectors and business rates are adding to their woes. 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 to properly appeal them and is transparent. "
"With the 2017 rating revaluation producing some of the largest increases in liability in a generation, it appears this government has proved again that it neither understands the pressures facing businesses or has a willingness to act on calls to change”.