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02.11.15

‘Check, challenge, appeal’ system to streamline business rates process

Proposals put forward by local government minister Marcus Jones aim to streamline the process by which businesses check and challenge their rates bills.

Jones said the ‘check, challenge, appeal’ process would end a “decades-long deadlock” caused by excessive amounts of speculative appeals that led to unnecessary deals and some “unscrupulous agents”.

About 70% of the 850,000 appeals submitted against rating valuations for the 2010 rating list result in no change to the rateable value, and less than 2% proceed to a tribunal hearing.

The vast majority of these are submitted by agents, many of whom work on a ‘no win, no fee’ basis.

The local government minister said: “The business rates appeals process has been in a decades-long deadlock, hampered by some unscrupulous agents making speculative appeals – sometimes for businesses unaware this is being done on their behalf.

“A key part of our long-term economic plan is to turn this around and streamline the system, which is why we’re proposing a straightforward three-stage process so people can check and challenge their valuations and be confident they’ll get a fair deal.”

The government’s proposed three-stage process would include:

  • Check: ensuring the relevant facts are up to date and accurate, with any agreed errors quickly corrected
  • Challenge: allowing the business to challenge the rateable value on which their business rates bill is based, giving them the opportunity to set out their grounds for challenging, an alternative valuation and to put forward supporting evidence – Whitehall expects the greater majority of cases to be resolved by this point
  • Appeal: offering the opportunity to appeal to an independent valuation tribunal
  • Source: Gov.uk

The Valuation Office Agency would also develop a simple online service that allows customers to provide information and track the progress of their ‘check or challenge’.

A new fee would be charged for anyone seeking to lodge an appeal in order to ensure as many cases as possible are settled beforehand. The fees, of around £100 to £300, would be refundable to anyone whose appeals are successful.

The deadline to respond to the government’s consultation is 4 January of next year. If reforms are given the green light by Parliament, they will be implemented using extended powers in the Enterprise Bill.

The move builds on the chancellor’s plans to devolve business rates to local areas announced earlier this month. By the end of this government, local government will retain all of their local taxes, including the £26bn of revenue from business rates.

Whitehall will also scrap the Uniform Business Rate and give councils the power to cut business rates. While this is expected to boost local economic activity, credit agency Moody’s recently argued that devolving rates will drive up council debt as a result of increased borrowing to invest in business development.

It added only councils with a strong potential to stimulate local businesses would benefit and strengthen their credit, while regions that fail to harness business growth will dependent on uncertain returns.

(Top image c. Anthony Devlin/PA Images)

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