Colliers estimate that on current run-rates businesses will face a further three to four-year delay before they see their Business Rates appeals resolved
Big Issue is How the Number of Challenges Are Simply Not Being Resolved and the VOA is Running Out of Time.
Latest figures released by the Government today on CCA, the "Check Challenge Appeal" Business Rates Appeals System illustrate a time bomb about to explode as the backlog of claims and challenges grows and the VOA, the Government’s Valuation Agency is not properly resourced to deal with this.
The VOA's figures show that in the 33 months since the system was introduced (April 1st 2017 to 31st December 2019) 352,090 properties have started the appeal process (been “claimed”), averaging a claim rate of around 10,000 properties a month. On this basis Colliers conservatively estimate that by the end of the list in April 2021, we will see a further 160,000 claims made, meaning that over half a million businesses will have started the appeals process.
However, such businesses look likely to face severe delays. Today’s figures reveal 137,360 Checks have been registered since the list began, which is 40% of those currently being claimed. At current run rates that means that by April 2021 the amount of checks will have reached only 200,000 of the 500,000 properties claimed.
And turning to Challenges, the picture is even more worrying for rate payers. 26,690 Challenges have now been registered, which is 20% of the numbers going through the Check stage. This means on the current run rates there will be 40,000 properties that will have a gone through the Challenges stage by the end of the current list in April 2021.
Moreover of the 26,690 Challenges registered, only around 36% (9,700) of these have been resolved with 16,990 (64%) incomplete or outstanding. Last month, in December 2019 4,980 Challenges were submitted, but 1270 were resolved and this differential between the two figures appears to be growing every month. It is not difficult to see that the system is going to increasingly struggle to clear such challenges and the situation will only get worse.
Colliers has estimated that 9,700 challenges cleared averages out at 294 a month, in the 33-month period since CCA began. In the last six months the VOA did up its game – and cleared around an average of 566 Challenges a month, but even if it kept at this rate, it would take over 4 years to finish the 2017 list, if the current number of challenges continues to flows through at current rates.
And even if the VOA upped its game even further and managed to resolve 1000 Challenges a month, Colliers estimate it would still take 30 months to get through the back log, that is another two and a half years!
“This is a disaster, “says John Webber, Head of Business Rates at Colliers International, “On our reckoning, businesses even on a best-case scenario are going to be waiting over two and a half years to get through the appeals process. For many businesses this is totally unacceptable.”
“Over complicated procedures, lack of guidance and a largely un-navigable new on-line portal discouraged many companies from starting the whole CCA process, despite many with good cases for challenging their bills,” continued John Webber. “It now looks like more companies are gritting their teeth and are registering, but the slow rate at which they are being processed is alarming."
Colliers believe that lack of manpower at the VOA is a big issue.
This is backed up by the VOA’s own accounts. As of 31/3/2012 the VOA had 3564 full time staff in 72 offices. These managed to clear 236,000 appeals in 2012/3. By comparison as of 31 March 2019, the VOA has 3,200 staff in only 43 offices. They managed to clear 76,300 appeals in 2018/9 – so a third of the numbers of 2012/3.
As Webber comments further, "The lack of planning, insignificant time to trial the system before it went live, lack of desire by the government to engage with agents and their software providers and total understaffing of the VOA has resulted in an appeal system unfit for purpose. With the 2017 rating revaluation producing some of the largest increases in liability in a generation, and with the 2021 List soon on its way, the government can’t carry on ignoring the calls from business for reform and providing businesses with a decent appeal system."