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Business rates appeals drop under ‘complicated’ system

Businesses are struggling with the new ‘check challenge appeal’ (CCA) business rates appeals system, according to rating experts at Colliers International, commercial real estate agency and consultancy.

New figures released by the government show that in the 21 months between 1 April 2017, when the new system for appealing against business rates was introduced and 31 December 2018, just 65,380 have begun to dispute the Valuation Office Agency’s (VOA) business rates assessments England. Real estate firm Altus Group puts this figure at 150 businesses a day.

This accounts for less than 4% of the 1.88 million properties assessed for business rates in the country. There were 330,000 (over five times as many) appeals in the same period after the 2010 list.

The VOA’s figures also show that only 220,000 properties have been approved to begin the check system and for CCA proceedings to begin. This means 160,000 are potentially still sitting in the system, not able to get through to the check stage.

Furthermore, only a third of challenges have been resolved as the 5,000 challenges cleared averages to 400 a month despite 800 a month being submitted.

Altus Group said councils across England estimated the cost of business rates appeals to be £1.1bn for the next financial year in 2019/20, £101m lower than the current 2018/19 financial year.

The Ministry of Housing Communities and Local Government have confirmed that they expect councils in England to collect £25bn in business rates in April for 2019/20 up £206m with the standard tax rate exceeding 50% for the first time in April.

John Webber, head of business rates at Colliers International, said: “Over complicated procedures, lack of guidance and a largely un-navigable new online portal are still discouraging those with good cases from challenging their bills. At the very least businesses now need to employ agents to help them get through the system, whereas before many could appeal directly themselves.

“The lack of planning, insignificant time to trial the system before it went live and apparent lack of desire by the government to engage with agents and their software providers has resulted in an appeal system unfit for purpose, however the VOA tries to dress up the figures. With the 2017 rating revaluation producing some of the largest increases in liability in a generation, and 2018/9 and 2019/20 building up further rises, it appears this government has proved again that it neither understands the pressures facing businesses or has a willingness to act on calls to change.”

Alex Probyn, president of UK expert services at Altus Group, who’s firm lodged around one in six of all appeals, added: “Despite some valid criticisms of the new appeal regulations, the system works if you get stuck in and we continue to engage with the VOA on ways to help improve it. We increased our volume by 90% in the third quarter of 2018 and the VOA are now clearing more checks than they receive which has to be some positive news for business.”

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