Welsh Government’s Business Rates appeal reforms could do more harm than good, warns Colliers International

John Webber, Head of Rating, Colliers International. Copyright Nick Cunard / NCSM Media.

The Welsh Government’s proposals to reform the business rates appeals system seems to be going in the wrong direction, claims John Webber, Head of Business Rating at Colliers International, the global property consultancy business and, “…will add to the burdens of rate payers rather than alleviate them.”

The Welsh Government has just published its consultation paper outlining its proposals for new arrangements and is seeking feedback from businesses by January 9th 2018. At the centre is the process by which ratepayers can appeal against the rates valuations of their properties, from which their business rate bills are calculated.

A similar consultation in England had led to the new Check, Challenge Appeal system (CCA) introduced in April 2017 and despite claiming that the Welsh Government had no intention to “simply adopt that approach” a closer look reveals that its preferred arrangements largely do reflect the English system with some added additional flaws.

Check Challenge Appeal has been a disaster in England, claims Colliers, with very few Checks or Challenges, frustrating businesses who wish to appeal against their rate bills in a simple and straightforward manner. A FOI request made by Colliers to the VOA concerning businesses using the new appeal system, found nearly 90%of the 847 respondents were dissatisfied or very dissatisfied with the new system calling for greater clarity, speed and guidance. Many have found it impossible to navigate. Yet this appears to be the system the Welsh Government is largely proposing.

Moreover, the Welsh Government is also proposing to change the rules on backdating appeals. Currently there is no limit for backdating appeals to when the incorrect valuation was made. The Welsh Government now proposes to limit successful appeals by only backdating to the date the appeal was made. This means a full refund would potentially not be paid if an appeal wasn’t lodged at once, but given the number of steps a company has to make to lodge an appeal the process could take months if not years. Ratepayers would therefore be penalised through no fault of their own, because the Welsh Government wants more “certainty”.

Commenting John Webber, Head of Business Rating at Colliers International said, “It’s alarming. The Welsh Government claims it wants the appeals system to be  ”improved and tailored to better meet the needs of Wales” but  it does not seem to have learnt from the mess that’s been created by the CCA process in England, and one wonders if the true motive is helping businesses or just making its own life easier by making it virtually impossible to appeal against an unfair valuation.”

“We are writing to our clients asking them to take part in the consultation and to put their views down strongly.  It will be interesting to see if the Welsh Government takes these views on board or whether, as in England, it totally ignores the advice of the professionals and allows businesses to suffer as a consequence. “

Colliers Manifesto for Business Rates Reform includes:

1. More frequent revaluations, three-yearly, at least, by 2022;
2. Increase funding for VOA in order to deal with existing appeals’ backlog;
3. Release VOA from pressure exerted by local councils and HM Treasury;
4. Introduce a register of appeals professionals – removing the ‘cowboy’ element;
5. Root and branch reform of current business rates exemptions and reliefs.