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Lengthy business rates appeals process ‘must be dramatically curtailed’

The period allowed for each stage of the government’s proposed three-stage business rates appeal process must be “dramatically curtailed”, the District Councils’ Network (DCN) has argued in its response to the Whitehall consultation.

The consultation, which closed yesterday, hoped to gain views on plans to reform the business rates appeals system to streamline it as a more transparent service. Part of this included splitting the process into three stages – check, challenge and appeal – each with its own timetable.

But the DCN said the timetable involved is “far too lengthy” and cannot be supported at a time when local government is “going to be even more dependent” on this form of income.

“Our proposals would see a much shorter timetable for resolution of challenges, which would benefit ratepayers as well,” its response says. “Access to the tribunal stage should be better regulated by introduction of substantial fees, which would be lost where appeals are unsuccessful, and the upper tribunal should no longer be available as a venue to re-run tribunal hearings.”

If the proposals are to deliver a “streamlined and efficient system”, the DCN said, they must be radically re-thought to “secure much swifter decisions where a ratepayer challenges the rateable value”.

“If there is a change and a refund is due, this must be established quickly so that councils have certainty about their revenue position,” it continued.

“It will not be acceptable if the reformed system continues to result in changes five or even 10 years after the event, as has been experienced recently with rating appeals about GP surgeries, power stations etc.

“A number of district councils have suffered significant adverse financial impacts as a result of the current system, and new arrangements need to deliver much speedier resolution when there are challenges.”

Modelling the government’s proposed timetable for the three-stage system, the DCN said the whole process can take over three years – especially considering the uncertain timeframes of the challenge and appeal stages. This figure already takes no account of agreed extensions, the ability of Valuation Office Agency (VOA) to pause challenges while considering whether documents are complete, or the Tribunal ability to accept out of time appeals.

“It may well be that the time frame will be shorter for many or even the majority of cases,” it acknowledged. “However our point is that the time frame is excessive, particularly given the ability of ‘check’ to be entered at any time during the life of the list. Having decisions in 2023 or later that are backdated to 2020 or even earlier will fundamentally undermine district councils’ ability to plan their finances in the new local government finance system.”

Suggesting a new model, the DCN said the whole process should take no more than 12 months from start to finish. It proposed no more than three months for the check stage, three months for the challenge stage, and a Tribunal hearing to take place as soon as possible during no more than six months.

“We understand that the lengthy timetable set out in the consultation paper is designed to spread workload for the VOA. This was acceptable when the consequence of slow processing of appeals was felt by the government,” the DCN said.

“However that effect will now fall wholly on local government including district councils. Given the massive reductions in grant that have already occurred or are planned in the period to 2020, business rate income has taken on a much greater significance for district councils in managing their finances. Thus lengthy timetables are no longer acceptable.”

Appeals fees

It acknowledged that, as a consequence of shorter deadlines for each stage, more proposals could reach the challenge of appeal stage. Given that it will be “essential to choke off hopeless and frivolous cases from clogging up the appeal stage at tribunals”, the DCN supported introducing significant fees to ensure only “determined” applicants with a strong case move to appeal. These fees would be refunded if the appeal was successful.

“We believe fees should be linked to rateable value and be set at a level that causes the applicant to think carefully about whether to proceed with an appeal. Staking £100 to £300 on an appeal where the rates payable annually are in the thousands or even tens or hundreds of thousands will not give sufficient cause to pause,” it continued.

“Thus we suggest a fee of at least 10-20% of rateable value subject to a minimum of £500, but capped at a level of around £50,000.”