Proposed changes to business rates set to cause continued problems, warns Vail Williams

Changes proposed by the Government to address the failings of the current business rates system may compound problems for occupiers seeking to appeal their rates.

Ratepayers that don’t act fast to challenge their business rates, risk being caught in time consuming and bureaucratic logjams, according to rating experts at property consultancy Vail Williams.

The Department for Communities and Local Government (DCLG) is consulting on proposed changes aimed at making the appeal process less time consuming by limiting the number of appeals that are submitted. Vail Williams predicts that if the changes are implemented, they could have the opposite effect of making an already complex and slow process even more drawn out. The Government intends to introduce the new rules on October 1, 2014.

“The Valuation Office Agency, which deals with processing the appeals, maintains that the majority of appeals received are speculative and from ratepayers who have no real understanding of whether their assessment is excessive. The new proposals are designed to limit the number of rating appeals received,” commented Laurence Roberts, Vail Williams partner.

He explained: “Under the proposals, companies seeking to appeal their business rates will be required to submit a very detailed initial statement saying why they believe their rating assessment is too high, or incorrect for other reasons. The statement will be ruled invalid unless it is sufficiently detailed.”

However, Vail Williams considers that occupiers will still be intent on challenging their rating assessment by appeal due to the high cost of business rates.

“It appears that Government is trying to improve the business rates system to make it less complex and time-consuming by deterring weaker, speculative appeals, so enabling the Valuation Office Agency to process stronger claims quicker,” said Laurence. “The danger is that the proposed changes will weigh the system down still further, resulting in further appeals being referred to the Valuation Tribunal and creating an additional back log due to the Tribunal’s very limited capacity to hear appeals.”

He added: “The Government has failed to address the fundamental issue of resourcing the Valuation Office Agency correctly, so all appeals can be properly considered and dealt with in a timely manner. While we can see what the Government is trying to achieve, it is inherently unfair as it will potentially deter some ratepayers appealing. In addition it misses the point about the need for the fundamental change of the business rates system. The real problem is that the current system is perceived as unfair and ineffective and needs radical change to assist business.”

“Vail Williams will be submitting a formal response to the DCLG consultation with representations on behalf of our clients by March 3. However, I fear that there is a very strong likelihood that the new rules will come into effect later this year with little or no amendment. In the circumstances, occupiers concerned about the level of their business rates should consider whether to appeal their rating assessment appeal before October.”