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News - 31/08/2016

Consultation on statutory implementation of Check, Challenge, Appeal delivers yet another blow for ratepayers

The latest plans from the Government in respect of the ongoing reform of the business rates system in England could have 'significant financial consequences' for those ratepayers with a valid appeal from 1 April 2017, according to Business Rates experts Lambert Smith Hampton (LSH).

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The publication of ‘Check, challenge, appeal – reforming business rates appeals – consultation on statutory implementation’ made clear the Government’s intention to plough on blindly, despite many months of discussion and countless papers submitted by industry experts stressing that the proposals are in fact more confusing, less transparent and more unwieldy than the current system.

Under the latest proposals the Valuation Tribunal will be prevented from amending the rateable value of a property unless it is ‘outside the bounds of reasonable professional judgement’. The actual range is yet to be defined but even a margin of 10% either way could have significant financial consequences for those ratepayers with a valid appeal.

For example, if a property was originally valued with a rateable value of £1m and the ratepayer believes it should be £900,000, the Valuation Tribunal would be directed to rule that the original valuation should stand, irrespective of the evidence presented to them.

Paul Easton, National Head of Business Rates at LSH, commented: "We've been lamenting unreasonable delay between revaluations that have left so many businesses paying pre-crash level rates bills for years. However, we now have a revaluation that will have a limited impact due to an acceptance that the rates will not be changed on appeal, even if they are 10% adrift of a fair value! No other tax system operated by HMRC works in this way.

“What incentive for corporate investment in England will such an unchallengeable property tax regime be? With an immoveable empty property rates tax and the increasing inability to delete buildings from the rating list during periods of redevelopment, it seems the Government is trying to disincentivise investment - seemingly totally at odds with the important ‘open for business’ message that is being bandied about post-Brexit.

“A lot of this is also fuelled by the need for local authorities to have certainty of income for the business rate retention scenario that is being phased in by 2020; no challenge, no shortfalls. Increasingly, however, the local authorities are getting anxious about retention and themselves are calling on Government for more clarity on the funding reforms.

“The Government needs to stop tinkering and needs to start listening to those who actually use the rating appeal system."


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