Thousands of firms hit in tax computer meltdown

Appeals gridlock ignites new fury over rocketing rates demands

THE business rates system was facing meltdown last night as a new multi-million pound ‘super computer’ blocked thousands of complaints against rocketing charges.

Many companies have been facing collapse after receiving soaring business rates bills. Thousands of firms have been trying to appeal against the charges but the computer crisis means they have been unable even to register their complaints.

In Scotland, which has a separate business rates system, Finance Secretary Derek Mackay unveiled a £45 million support package earlier this year, amid fears that nurseries, hotels and pubs could be forced out of business by revaluations. Some faced hikes of up to 620 per cent.

South of the Border, in the first month of operation of the new system, fewer than 100 companies were able to lodge appeals.

In the first three months after the last revaluation in 2010, appeals averaged 4,500 per week.

Business owners are having to pay sky-high bills, with experts warning the first complaints may not be resolved until the end of next year or even much later.

Rates bills have to paid even when they are being appealed. Those business owners who have been assured by experts that their appeals are highly likely to be successful are having to pay now then wait to be reimbursed at some point in the future.

The computer fiasco is set to reignite the political row over business rates which engulfed the UK Government earlier this year amid warnings that thousands of companies could be driven to insolvency by higher bills. After initially dismissing concerns over rates bills earlier this year, Business Secretary Sajid Javid announced an aid package worth £300million to help the worst hit firms.

Sources last night said about 4,000 business had got as far as registering their name and address but were blocked from logging their appeal. Mark Rigby, chief executive of business rates advisory group CVS, branded the computer problems a ‘scandal’ leaving the owners of many businesses ‘in limbo’.

A spokesman for the Valuation Office Agency this weekend insisted that the £3.1million computer system had been

working ‘normally’. However, the computer system is reported to crash frequently and there have been further delays because there is now a limit on the number of appeals that can be brought by any one advisory firm to just 12.

Most appeals are handled by a handful of large agencies which lodge appeals on behalf of companies. Each advisory agency typically handles hundreds or even thousands of appeals, which means the 12 case cap has created a severe bottleneck.

A source at one advisory firm said: ‘Businesses are calling us every day saying the system is crashing at the point where you verify your property because of “high volumes of visitors”.’

Another senior business rates expert described the new appeals system as a ‘car crash.’ Sources close to the Valuation Office insisted the new system would eventually make the process better.

Rates bills are based on property values, meaning the recent review saw bills rocket in areas where property values have jumped.