A £10m computer which could prevent retailers from paying unfairly high business rates bills is sitting idle due to Government budget cuts.
Business rates revaluations could be conducted annually through an existing computer system at the Valuation Office Agency (VOA), which advises the Governemnt on valuations and property.
It has emerged that “some years ago” the Government spent £10m on creating an automated valuation system to calculate council tax.
The news emerges as the Government comes under fire for delaying the next rates revaluation – which takes place every five years – by two years. This means the Government will not amend the rateable value of commercial properties until 2017.
Retailers including Morrisons and Alliance Boots have criticised the action because it means the rates charges, which are based on rents that have actually fallen since the last revaluation, are not being redistributed fairly so many retailers are paying more than they should, while others are paying less than they should.
According to Paul Sanderson, president of the International Property Tax Institute and former director of the VOA, the computer could be converted to automatically revalue business rates.
But in another blow to retailers, the Valuation Office Agency (VOA) , which calculates the rates, concluded that the conversion would be too costly and as the council tax revaluation was later scrapped, the computer is now sitting idle.
Speaking to Radio 4 in the Face the Facts programme this morning, VOA director of business rates Mary Hardman said: “We felt the computer couldn’t be adapted at a reasonable cost for the business rates revaluation.
“The computer isn’t used for anything. It was money we had to use to develop the council tax revaluation but that was subsequently cancelled.”
Brandon Lewis, the minister responsible for business rates at the Department for Communities and Local Government, said the Government has postponed the revaluation to help provide certainty for the business sector. But he denied annual valuations would help the sector.
“There is no automatic system that would allow us to create annual valuations at the moment. More frequent revaluations would create more uncertainty and more anxiety for businesses,” he added.