Latest commercial property news from Lambert Smith Hampton

Rates: The good, the bad and the ugly

27/02/2015

Commercial property occupiers are being urged not to be rushed into making wrong decisions by unscrupulous firms seeking to exploit the confusion caused by poorly thought through changes to business rates rules.

The Autumn Statement contained a proposal by Government to impose a 31 March 2015 deadline for appeals under the current rating list.
 
Appeals submitted after this date will still be valid, but savings resulting from reduced assessments will not be back-dated beyond this date. This means that, potentially, up to five years’ rates rebate will not be paid to the occupier but retained by Government instead.

Reputable advisors warn of costly implications for panicked occupiers 
The change was hidden in the small print and, despite very costly implications for anyone missing the deadline, full details are still to be confirmed just weeks before the deadline, according to Paul Stevens, director of rating at the Bristol office of LSH.
 
“Reputable rating advisors are seeking to ensure that all of their clients’ assessments are reviewed and any necessary appeals made before the deadline.
 
“However, some of those firms better known for their hard sell tactics are seeking to exploit the confusion caused by the lack of clarity to panic occupiers into decisions that may prove costly in the long term,” he said.
 
“A number of our clients have been approached by firms making claims that, on further investigation, just do not stand up. Some very dubious hard sell techniques are being used to try and panic businesses into signing instruction letters that tie them into extremely high fee agreements. In a number of cases, appeals actually risk increasing rates bills.”

 

Government to retain over paid rates for their own use
The revaluation of all commercial property due to take place in 2015 was delayed by two years. It will not now take place until April 2017 and will be based on rental evidence as at April 2015. 
 
“This delay in the revaluation has been costly to many businesses who were hoping to see the rating assessments on their properties fall on revaluation, reflecting falls in rental value since the peak of the market. It was, however, assumed that the right of appeal would continue until the end of the list as has always previously been the case.
 
“The proposals for a 31 March 2015 deadline appear to be an attempt by Government to have their cake and eat it, retaining over paid sums on rates accounts for their own use. Their failure to issue clear guidance on how the deadline is to operate is only making things worse.
 
“Our concern is that the short notice imposed on this new deadline will panic people into hasty decisions that may later be regretted,” added Paul.

 

Unscrupulous advisors seek to capitalise on current confusion
“The rating industry has always been plagued by unscrupulous advisors and it is clear that they are seeking to seek to capitalise on the current confusion. We have been contacted by a number of our clients who have been approached by such firms in recent weeks making claims that, on investigation, do not stand up.”
 
LSH believes the introduction of the new deadline has not been adequately thought through and has the potential to put an unbearable strain on an appeals system already struggling to cope.
 
Anyone that is approached by a firm making promises that appear too good to be true would be well advised to check the background very carefully and not get bounced into a decision that they may later regret, said Paul. 

For further information relating to this news article contact 

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