Know Business Rates

Business rates are a tax on the right to occupy commercial premises and are a significant financial burden for most organisations.

The amount you pay is based upon the Rateable Value of your property, which is set by the Valuation Office Agency (VOA) using rental market evidence and is re-assessed typically every five years - a process known as revaluation.

Revaluation

The latest Business Rates revaluation came into effect on 1 April 2017 – two years later than originally scheduled - and introduced new rateable values for all commercial properties in England and Wales*.

As a result of the extended revaluation period, there have unsurprisingly been some wide variations in how rents have moved, creating some significant regional and sectoral variations.

In an attempt to ensure a fairer reflection of rental values moving forward, the Government has increased the frequency of future revaluations. The next date has been set as 1 April 2021 and will be based on rental evidence as at 1 April 2019.

New appeal system

The Government also introduced a new appeal system to coincide with the 2017 Business Rates revaluation, known as 'Check Challenge Appeal'.

Ratepayers and their advisors will now have to follow this three-stage process, which has been widely criticised for being unnecessarily bureaucratic and complex, if they wish to challenge their rateable values in the future:

  1. Check:
    The ratepayer or agent can request details of the information relied upon by the Valuation Office Agency (VOA) to determine the new rateable value and ‘Check’ it for factual errors, with any amendments submitted as a formal declaration. Once receipt of the ‘Check’ has been formally acknowledged, the VOA has up to 12 months to decide whether to accept the proposed changes and amend the rateable value. If no agreement can be reached, the ratepayer or agent can officially ‘Challenge’ the rateable value within four months of receiving the VOA’s decision, or after 12 months have elapsed.
  2. Challenge: 
    In order to ‘Challenge’ the rating list entry, the ratepayer or agent must prepare a detailed submission setting out the reasons for disputing the rateable value, including an alternative valuation backed by supporting evidence. If no agreement can be reached, the ratepayer or agent can ‘Appeal’ to the Valuation Tribunal for England within four months of receiving the VOA’s decision, or 18 months have elapsed.
  3. Appeal: 
    The Tribunal will consider whether the VOA has made the correct decision in respect of the challenge, based on the evidence put forward at the ‘Challenge’ stage – no fresh evidence will be permissible unless formal agreement is sought from the VOA. If the Tribunal disagrees with the VOA’s decision, it may conclude that the ratepayer’s proposed rating list entry is correct, or alternatively it may substitute its own. The ratepayer or agent cannot change the grounds of the ‘Challenge’ (even though some may have been resolved) and cannot introduce fresh evidence without the formal agreement of the VOA. A fee of up to £300 will also be levied (refunded where the Tribunal outcome is in favour of the appellant).

 

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