Talks between the Government’s Valuation Office Agency (VOA) and the RSASG ( RSA COVID-19 Strategy Group) , the body set up to represent 85% of the ratepayers with outstanding COVID-19 MCC (Material Change of Circumstances) business rates appeals – have come to an abrupt halt, a decision which Colliers believes may have been directed by the Chancellor. And there is no indication that talks will resume.
The decision has been criticized as disastrous for hundreds and thousands of businesses by John Webber, Head of the business rates team at Colliers, who himself is part of the RSA (Rating Surveyors Association ) negotiating with the VOA, along with other respected firms of rating surveyors.
According to Colliers, many businesses that occupy office space have been severely impacted by the impact of COVID-19 and the various lockdowns, but unlike businesses in other sectors such as those in retail and leisure/hospitality, office based businesses have received no rates holiday, and only the smallest businesses were able to benefit from the initial government grant schemes. This is despite many office-based businesses seeing a massive disruption to their business operations due to the pandemic and lockdowns, with staff working from home and offices left largely unoccupied. Many businesses have seen a significant drop in profitability. As a result, the number of businesses appealing their business rates on the grounds of Material Change of Circumstance, is at its highest rate ever.
Latest published CCA (appeals) figures reveal there were 289,510 Checks (the first stage of the appeals process) between March and December 2020. Colliers has said the number of businesses starting their appeals has rocketed further since the New Year and estimates the number of outstanding COVID-19 checks (the first step in the appeals process) is now around 350,000.
Webber says, “The RSASG and the VOA had been discussing what should be done about the hundreds and thousands of businesses lodging an MCC since March last year and given the pressures on the current appeals system, the most sensible and efficient thing to do would have been to grant such businesses a blanket percentage reduction on their rates bills for 2020/21. This would prevent what could be years of uncertainty whilst the VOA worked through the backlog"
Although the RSA and VOA were working towards an understanding last Autumn, a premature press release was issued to the media by one firm of agents in late December saying a deal had been agreed, despite nothing having been formally signed. This release had not been authorized by the RSA. As a result, the VOA appear to have been directed to break off all negotiations with the RSA. They then requested a stay of the discussions for the whole of January.
The RSA was hoping negotiations would begin again in February, but the VOA has again said it is unable to take part in any further discussions for the foreseeable future, without explaining why there is a refusal to engage.
As John Webber says, “It is outrageous that whilst jobs are being lost by the hour and businesses prevented from occupying office space in towns and cities up and down the land, that the Chancellor effectively called a halt to discussions between the VOA with agents representing small and medium sized businesses at Christmas.
In these talks the VOA had tabled an initial offer of a 25% reduction in business rates which should have risen to 75% - but the offer was withdrawn as soon as it came to public attention and before it could be properly accepted.
Now around 350, 000 businesses have had to go through the notoriously painful CCA system to register their displeasure of having to pay business rates on property they have all but been able to occupy for 12 months. Amongst these are businesses who desperately need financial support if they are to survive into the Spring.”
“The RSA represents 85% of those ratepayers with outstanding COVID-19 checks and we have been working hard to find some solution to their problems quickly. For the VOA to be instructed that it should not resume negotiations or to engage with us in a constructive manner, could sound the death bell for many firms that have been hanging on in the hope for a reprieve on their business rates.
One wonders about the Chancellor’s hand in this. Is he just hanging on so he can play Father Christmas at the Budget on 3 March – to bask in the glory of handing back to businesses monies they should not have paid out in the first place?”
“We urge the Chancellor to direct the VOA to re-enter negotiations with us, or to come clean and explain why it won’t. Our clients deserve more consideration than to be left out to dry for an extra 3 months in this way.”