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Outrage from employers’ groups at ‘illegal’ changes to business rate appeals

Business leaders have hit out at the DCLG’s planned changes to business rates that are set to be voted at the next revaluation on 1 April, arguing that a clause in the proposed changes is “potentially illegal”.

In a letter signed by 13 employers’ groups, including the British Retail Consortium (BRT) and the Confederation of British Industry (CBI), concern is raised about a clause that would prevent firms from appealing against rate rises even if they can prove they are wrong.

In its policy, Whitehall proposed introducing a law that says the Valuation Tribunal for England (VTE) would only be able to change property rates if the existing valuation was “outside the bounds of reasonable professional judgement”. The change was drafted in an effort to overhaul the antiquated system at present, which allows the VTE to make changes wherever it believes it is appropriate.

Signatories branded the clause “outrageous” as they call for the government to drop the proposed changes. They argued that the provision could be illegal as it does not define ‘professional reasonable judgement’, as reported by Business Insider.

However, a government spokesperson argued these claims are “simply false”, adding: “We are not preventing anyone from appealing their bills, or setting any margin of error for appeals being heard.

“We’re reforming the appeals process to make it easier for businesses to check, challenge and appeal their bills, while at the same time generous business rate reliefs mean thousands more businesses are seeing a reduction.”

But Helen Dickinson OBE, chief executive of BRT, one of the signatories to the letter submitted to the Joint Committee on Statutory Instruments, argued that given the growing burden of business rates, “it is essential that each ratepayer pays its fair share”.

“However, the plans for the new appeals process would mean that a business rates valuation determined to be inaccurate by the independent VTE would only be corrected if it is deemed ‘outside the bounds of reasonable professional judgement’,” she said.

“This would be unfair to ratepayers and create additional uncertainty for local government. Instead, a collaborative working relationship between the Valuation Office Agency and ratepayers, where information and evidence can be shared and appeals avoided, should be sought.”

Businesses also voiced concern about the rates changes being unfair on some organisations.

Other signatories to the letter included the British Property Federation, the Federation of Small Businesses and the British Chambers of Commerce.

The DCLG has promised that reforms set to be introduced in April will see nearly three-quarters of businesses have their rates stay the same or be reduced, and that businesses will benefit from a £6.7bn cut in rates over the next five years.

Communities secretary Sajid Javid added: “Our regions have huge economic potential, and can be a catalyst to driving economic growth across the country

“The revaluation of business rates will help make sure bills are accurate, with nearly three-quarters of businesses seeing a fall, or no change. In fact, the generous reliefs we are introducing mean that 600,000 small businesses are paying no rates at all – something we’re making permanent so they never pay these bills again.”

The secretary of state finished by reassuring business owners that there is a £3.6bn scheme to support companies affected by the business rates revaluation.

According to national press, Javid and chief secretary to the Treasury David Gauke have also written to Conservative MPs criticising “simply untrue” reports claiming that “rates are going to soar, that appeals are being banned and that hundreds of businesses will be forced to close”.

Both him and Gauke insisted that the revaluation was a “vital step in keeping the business rates system fair, transparent and accurate”.

Last week, the LGA publicly welcomed the DCLG’s consultation on the move towards 100% business rates retention for councils, stressing that the move must be “fundamentally underpinned” by a proper needs assessment.

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