Latest Public Sector News

06.11.15

Business rates self-assessment would save councils £1.75bn – LGA

Business rates should be reformed even further by allowing companies to self-assess their rateable value to keep councils from footing refund bills, the LGA has said today (6 November).

The association said the recent shake-up of business rates makes it imperative for further devolution to protect authorities from the risk of appeals, which it claims has affected nearly one million companies since 2010.

Under the LGA’s proposed reform, Whitehall would hand businesses the right to self-assessment in the Spending Review and allow the Valuation Office Agency (VOA) to challenge their bill after it is finalised.

This could ensure businesses are paying a rate they deem fair, while still allowing the VOA to appeal if not – helping increase certainty over oscillating incomes and potential refund costs. Local authorities currently have to cover half of all refund bills.

According to the LGA, this process could be done online and self-assessment would not be mandatory. Firms that choose not to self-assess would only have three months to appeal.

The LGA also claims this would cut down on government red tape and bring business rates in line with other self-assessed taxes such as VAT.

Councils argued that 900,000 firms have challenged their rates bill in the last five years, with around 330,000 appeals still left undecided. The high costs tied to risk of appeals and refunds have allegedly forced councils to divert £1.75bn from public services.

These costs could drive councils to “divert more of their limited resources” when the next national revaluation occurs in 2017, and could potentially soar when they start being liable for all refunds.

Cllr Claire Kober, LGA’s resources portfolio holder, said: “By 2020, local government will retain all of its business rates income, which will provide a vital boost to high streets and investment in infrastructure and public services. However, it will also mean councils will be liable for 100% of refunds.

“This makes reform of the appeals system even more urgent to protect councils from the growing and costly risk of appeals and ensure businesses are happy with what they pay.

“Our self-assessment business rates proposals would free [councils] to use the money put aside to cover the risk of appeals to fund vital services and help plug growing funding gaps.”

To support its case, the association cited the recent “damaging appeal” resulting from Virgin Media’s attempt to merge business rates payments across the country. The LGA said this nearly forced councils to dish out £225m.

And a handful of GP surgeries have also recently secured a legal ruling to reduce their rateable value by more than 60%, which the association fears could have a ripple effect nationwide as 1,600 similar surgery appeals are still unresolved.

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

last word

Some libraries are better than others

Some libraries are better than others

Helen Milner, chief executive of Good Things Foundation, formerly the Tinder Foundation, expands on the organisation’s recent claims that protecting libraries at all costs could be holdin more > more last word articles >

public sector focus

View all News

comment

Shaping the future of local government through districts

23/02/2017Shaping the future of local government through districts

Mark Pawsey (pictured), the MP for Rugby and the chair of the All Party Par... more >
Bristol: the booming smart city

23/02/2017Bristol: the booming smart city

Barney Smith, CEO at Bristol Is Open, explains how the innovative project c... more >

interviews

McMahon: I worry that the public are not part of the devolution conversation

20/12/2016McMahon: I worry that the public are not part of the devolution conversation

Jim McMahon, Labour’s shadow minister for local government and devolu... more >

the raven's daily blog

And justice for all

23/02/2017And justice for all

Nothing less than a ‘whole-place’ pooling of public service budgets and devolution of criminal justice system powers to local level can create the conditions for c... more >
read more blog posts from 'the raven' >

editor's comment

21/02/2017Untapped potential

As PSE went to press, the government had just released its Industrial Strategy green paper, which has an ambitious aim to “improve living standards and economic growth by increasing productivity and driving growth across the whole country”.  Overall, the strategy was welcomed across the public sector. However, as you’ll read throughout this edition of the magazine, in order to make the aspirations a reality, there needs to be a greater level of freedom for all... read more >