Quick-fix team called in to tackle business rates

Trou­bleshoot­ers to re­vamp ‘Byzan­tine’ ap­peal process as firms face missing out on mil­lions in re­funds

The Sunday Telegraph - Money & Business - - Business - By Rhi­an­non Curry

HM Rev­enue & Cus­toms has been forced to sec­ond a team of ex­perts to the Govern­ment depart­ment re­spon­si­ble for business rates as civil ser­vants bat­tle to im­prove the ap­peals sys­tem.

Around 25 peo­ple are un­der­stood to have been moved from HMRC to the Val­u­a­tion Of­fice Agency (VOA) on a tem­po­rary ba­sis to work on a fix for the newly im­ple­mented “Check, Chal­lenge, Ap­peal” process, which has been be­set by prob­lems.

The sys­tem, which was launched last year, was in­tended to make it eas­ier for busi­nesses to query the amount they were pay­ing in rates, which are set de­pend­ing on the size and use of a par­tic­u­lar com­mer­cial build­ing.

But users have com­plained that the process is overly com­pli­cated, mak­ing it very dif­fi­cult to in­put data about their prop­erty port­fo­lios in or­der to get the most ac­cu­rate rating bill.

Fig­ures re­leased last week showed that the num­ber of ap­peals started in the 15 months since the rates were re- val­ued last April had crashed by more than 86pc, a fall which ex­perts blame on dif­fi­cul­ties us­ing the ap­peal sys­tem.

Jerry Schur­der, head of business rates at con­sul­tancy Ger­ald Eve, said: “Byzan­tine rules, fines for mis­takes and a barely nav­i­ga­ble on­line por­tal are dis­cour­ag­ing even those with le­git­i­mate com­plaints from chal­leng­ing their rates bills. Busi­nesses are clearly strug­gling to even get off the start­ing line in the ob­sta­cle course which has been de­signed by the Govern­ment.”

He pointed out that the prob­lem is es­pe­cially acute for small firms that have nei­ther the re­sources nor the ca­pa­bil­i­ties to nav­i­gate the new sys­tem. They are po­ten­tially missing out on mil­lions of pounds in re­funds, he said.

The HMRC team is un­der­stood to be work­ing to im­prove the “check” el­e­ment be­fore the end of the year.

Other sources sug­gested that the VOA was keen to re­cruit more mem­bers of staff, hav­ing laid off a num­ber in re­cent years, as it be­gins work on the next reval­u­a­tion of rates in 2021 when all prop­er­ties will be re­assessed.

A spokesman for the VOA said: “Some [business own­ers] are choos­ing to move on to sub­mit checks and, if needed, make chal­lenges, and some are not. This is how the ser­vice was de­signed to work.” He added that the pre­vi­ous ap­peals sys­tem was “bro­ken and en­cour­aged spec­u­la­tive ap­peals”.

Business rates are one of the fac­tors be­ing blamed for the cur­rent woes on the British high street.

Be­cause they are linked to build­ing size and lo­ca­tion, rather than to prof­its or turnover, tra­di­tional re­tail­ers are at a dis­ad­van­tage to on­line firms, which are not sub­ject to an equiv­a­lent pay­ment.

Paul Sou­ber, co-head of re­tail at Col­liers, sug­gested that the Govern­ment should change the VAT sys­tem in or­der to more ef­fec­tively tax com­pa­nies which trade via the in­ter­net.

“Could we cre­ate a two-tiered VAT sys­tem where, for ex­am­ple, you would pay VAT at 15pc if you shop in a phys­i­cal store and 22.5pc if you pur­chase on­line?” he asked.

“This would be both an in­cen­tive for peo­ple to shop in per­son – and also for on­line re­tail­ers to lease phys­i­cal stores.”

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