Biggest shake-up in modern times
Indeed, in March 2016, the Department for Communities and Local Government (DCLG) launched a consultation on the very subject, which included proposals for a Self Assessment and formula-based approach as alternatives to the current system. Yet, almost 12 months later, it is still analysing the feedback.
However, earlier this week (30 January 2017), industry sources speculated that the Government was close to announcing a switch to an entirely Self Assessment style business rates system, despite a spokesman at the DCLG reportedly saying “there are no plans at this time” to do so.
If introduced, Self Assessment will be the industry’s biggest shake-up in modern times. Rather than the VOA setting the rateable value of all 1.9m commercial premises in England and Wales on a five-yearly basis, as is currently the case, the ratepayer will be required to return a rateable value (presumably) to the VOA.
An explosion of new rating valuers
Paul Easton, National Head of Business Rates at LSH, said: “The business rates system is complex enough for many ratepayers and putting the onus on them to tell the VOA what their rateable value is, is not going to be an easy task. By and large, it will require specialist advice in the same way that most individuals employ an accountant to complete their Self Assessment tax return and almost all companies do for their tax affairs. This will undoubtedly lead to an explosion of new rating valuers entering the market place hoping to make a quick buck from the new DIY business rates system.”
As part of the ongoing business rates reforms, the Government has introduced a new appeals procedure from 1 April 2017 known as Check, Challenge Appeal, which will severely limit a ratepayer’s right to appeal, while simultaneously placing an increasing administrative and financial burden on them. If Self Assessment is introduced at the next revaluation in 2022, it would render the new system defunct.
Easton continued: “Rather than continuously ‘tinkering’ with the current business rates system to the point that it is becoming unworkable, the Government could solve all its problems by simply a) telling ratepayers how the VOA arrived at their rating assessment and b) providing more resource to the VOA and Valuation Tribunal England. Simple.”