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Business rates appeal: The new 3-step step system explained and explored

Aug 31, 2017

Business rates appeal: The new 3-step step system explained and explored

The new business rates schedule - which came into effect in April - also sees a new appeals process, the complexity of which could concern small business occupiers, argue surveyors and agents at Barker Storey Matthews.

‘Check, Challenge and Appeal’ is the snappy new mantra to remember for any small business wanting to challenge the Valuation Office Agency (VOA) about the business rating of its premises. 

The slogan summarises the three steps in the revised process which is supposed to improve and streamline the ‘appeals experience’. Not many businesses have had the pleasure of the experience yet but the considered view of property surveyors and agents is that the simplicity of the slogan belies the complexity of the new appeals system that may result in some businesses, especially smaller businesses, not appealing their business rates assessment.

Even before the Check stage, any business considering engaging with the VOA on the matter of business rates and possible appeal must open a Government Gateway account registering both a business and a nominated person acting as a representative for the business.    

Upon successful online registration, a unique identity (ID) will be provided and an agent can be appointed to act on the business’s behalf and begin the process. An agent can only be appointed by owners or occupiers of the property who have a registered personal or business interest in the property.

The Check stage then proceeds and it is at this point - and this point only during this whole process - that the VOA needs to be informed of any incorrect details about the land or the property which are held by the Agency.  However once submitted online at this stage, no further changes to this information can be made. As previously, though, suggesting changes to the details could lead to an increase in rateable value as well as a decrease. 

If the VOA does not agree with the proposed alterations, the Challenge is permitted but has to be made within four months of the Check decision, or 12 months after the Check was submitted if the VOA has not made a decision. 

The onus remains with the business owner or occupier - or the appointed property agent – to prove the VOA’s valuation wrong yet the case has to be made and proven without the benefit of disclosure of all the evidence held by the VOA.  This is akin to playing poker with your cards exposed on the table.  

The Challenge process requires substantial detail, including the Challenger’s proposed revised rateable value, a statement of specific grounds with supplementary evidence and a supporting statement. If the VOA does not concur then the Challenger has four months in which to launch a formal Appeal.  A Challenge may be made by a current or former property occupier or an authorised agent.  

If an owner/occupier or their agent does not agree with the VOA decision or can’t reach an agreement with the VOA, or if the VOA has not come back within 18 months of the challenge being submitted, there is the right to appeal.  

When it comes to fees and costs, the new 3-step process marks the end of the previous 2-stage process which had neither fees nor fines.  

Check, Challenge and Appeal have a punitive system of a £500 penalty for misinformation, ‘careless or deliberate’ mistakes in data or evidence provided. The new process also sees the introduction of fees for appeals – generally £300 per appeal or £150 for smaller businesses.  Fees may be reduced – at the discretion of the VOA – if matters can be dealt with through written representation only and without the need for a hearing.

Characterising the new 3-stage appeals system with a three-word slogan does indicate, at least, the desire to simplify and streamline the business rates appeal system and process and, ultimately, improve the situation for small businesses.

However, the consensus among many professional property surveyors and agents is that, in practice, the replacement of the more nuanced 2-stage appeal process by the absolutism of Check, Challenge and Appeal may do more than minimising speculative appeals or appeals from smaller businesses; it could actually deter appeals.

Although broadly speaking, a large proportion of the industrial and commercial property sectors in the regions served by Barker Storey Matthews core offices Peterborough, Cambridge, Huntingdon and Bury St Edmunds have not seen significant rises in rateable values in the new 2017 business rates list, we are only a few months into the new regime.

For more information about business rates and appeals contact Michael Beardall, 01480 451578, mjb@bsm.uk.com or see www.bsm.uk.com/rating-compensation-&-compulsory-purchase.

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