Whitehall leads rush to appeal rates

FIVE government departments have appealed against hikes in their business rates amid mounting fears that the biggest overhaul of the system for a decade will descend into chaos.

The Home Office is among a backlog of nearly 250,000 organisations and companies still awaiting the results of appeals against hikes in their rates made in 2010. Other Whitehall departments to appeal include the Treasury, the Department for Communities and Local Government, which oversees the rates system, the Department for Business, Innovation and Skills (DBIS) and the Ministry of Justice.

The new rates will see, from April, payments calculated to take account of rise property price rises since 2008. That means many businesses in the South East will face soaring rates while others in areas where high-street rental values have fallen will actually benefit.

The Institute for Fiscal Studies (IFS) said business rate revaluation will see an additional £800million a year taken out of London to subsidise other parts of the country. This “tax” is part of a “more general trend towards greater reliance on London” to provide revenue to fund services elsewhere, the IFS said.

Philip Hammond, the Chancellor, is expected to use his Budget to pay hundreds of millions in compensation to small businesses facing huge hikes.

Jerry Schurder, head of business rates at property consultants Gerald Eve, said: “The fact that nearly every major government department in Whitehall has challenged its rates bills indicates a lack of faith.

“Even Sajid Javid’s own department [the DCLG] has launched an appeal – making a mockery of his approach to businesses which is that they should just pay up and shut up.”

The Home Office, which shares offices with the DCLG, saw its rateable value rise from £13.5 million in 2005 to £24.9 million in 2010. It appealed the decision, when Theresa May was Home Secretary, and it’s case will be heard this month, seven years later.

Both the Treasury, which saw its rateable value rise from £7.3 million to £12.8 million, and the Ministry of Justice (£6.7 million to £12 million), mounted unsuccessful appeals. The DBIS succeeded in reducing its rateable value by £2.8 million on appeal.

A Home Office spokesman confirmed that there was an outstanding appeal, but added: “This decision was made as part of routine estate management. It would not have involved the [then] home secretary.”