Chaos warning over business rates appeals

Ministers were warned that the Government’s business rates overhaul will descend into chaos after it emerged that 250,000 firms are still waiting for decisions on their appeals from the last revaluation in 2010. Figures suggest that one in eight businesses is still waiting on the outcome of appeals dating back seven years as the Government prepares to change rates from April. Ministers are under pressure from businesses who warn they will face huge increases.

MINISTERS were warned yesterday that the Government’s business rates overhaul will descend into chaos after it emerged that 250,000 firms are still waiting for appeal decisions from the last revaluation seven years ago.

Figures published yesterday by the Valuation Office Agency indicate that the number, equivalent to one in eight businesses in England and Wales, are still waiting on the outcome of appeals dating back to 2010. It comes after the Government prompted a furious response from Tory MPs and companies with the first change in business rates in almost a decade. The new rates, which take effect in April, will result in companies paying rates which have been calculated to take into account the rise in property prices since 2008.

It means many businesses in the South East will face sharply rising rates while others in areas where high street rental prices have fallen will benefit.

Philip Hammond, the Chancellor, is expected to use his Budget to pay hundreds of millions in compensation to small businesses facing huge increases in their bills in an attempt to deal with concerns raised by small businesses.

Ministers are also facing criticism over plans to block business rates appeals even if companies can prove that they are being charged too much tax.

The Government has proposed new powers which would lead to appeals being thrown out if they are within “the bounds of reasonable professional judgment”, meaning the challenge would not even be considered. Experts have suggested that the new law could result in appeals being thrown out if there is a margin of error of up to 15 per cent.

Mark Rigby, of CVS Business Rent & Rates Specialists, said the Valuation Office Agency needed more support.

He said: “New rates bills land on the doormats of businesses up and down the country over the next couple of weeks so it is imperative that the Government intervenes and gets the VOA house in order ahead of what is expected to be another busy year for business rates appeals, which otherwise could end up in chaos.”

Last week Mark Field, a vice-chair- man of the Conservative Party, said Mr Hammond must back down from the “looming nightmare” of higher business rates in Tory heartlands.

Mr Hammond indicated on Monday in a meeting with Conservative MPs that he was “alive” to the impact of the changes on high street shops and was “open” about ways to help. He is looking at plans for new funds to help independent retailers and businesses.

A government spokesman said: “Today’s figures show how the appeals process is being clogged up by spurious claims, with over 70 per cent of appeals leading to no change to a business’s rateable value. VOA will continue to clear the appeals and at the same time introduce reforms to ensure businesses have the chance to check, challenge and appeal their bills quickly and easily.”

‘It is imperative that the Government gets its house in order, otherwise appeals could end up in chaos’