The ‘check, challenge, appeal’ regulations came into force on April 1, 2017 and now govern the business rates appeal process.
While business rates are undoubtedly a contributory factor to the struggles facing embattled retailers, the change in the appeals process is not to blame for the crisis engulfing high streets.
In the first full year, 18,400 checks were settled, compared with 11,520 appeals one year after the 2010 revaluation – an increase of 60% in tax dispute resolutions.
Of those checks settled, 13,230 were agreed or partially agreed culminating in tax rebates back to business – an overall success rate of 72%.
“The new processes act as a filter because no ratepayer wants to risk an increase in liabilities”
So to suggest, as some people have, that the new procedures and processes are a deliberate ploy to prevent meritorious appeals does not make sense, and risks hindering a collaborative approach to improve the system.
The system can work for those willing to get stuck in, and our statistics prove that if you work with it then it is possible to succeed.
Appeal numbers have dropped markedly but that was always going to happen for a number of reasons.
A key intention of ‘check, challenge, appeal’ was to create a more streamline, modern system that deterred speculative appeals.
The new processes act as a filter because no ratepayer and/or their representative wants to risk an increase in liabilities.
It is also true that the early period has seen new challenges that advisers and businesses have found difficult to overcome. We must work together to improve these.
A year on, more than seven out of 10 business rates appeals are successful, compared to fewer than three in 10 under the old regime.
Further, with the increase in thresholds for small business rates relief there are now an extra 362,951 properties that have a complete exemption from business rates.
Since April 2017, 655,970 properties have paid no business rates at all. This is more than double the number in 2010. There will be no need for over a third of all business properties with a rateable value to even appeal.
The reformed system is not without issues but new features are being added and it can be improved further in the longer term.
“The concern I have is whether the system might find it harder to respond to an influx of appeals”
Last month, the Valuation Office Agency outlined plans for delivering improved functionality to the online portal, which should make it easier for everyone. This should be warmly welcomed.
In a few months, application programming interfaces will allow major retailers to integrate their own applications or software with the VOA. They will be able to extract and provide information directly through their own systems.
The estate manager of a large supermarket could, for example, view all the properties claimed by their organisation on the ‘check, challenge’ service through their own operating systems.
The only concern I have is whether the system might find it harder to respond to an influx of appeals as volume inevitably grows. I urge the VOA to give this its full attention.
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