Check, Challenge, Appeal consultation: watch out for the sting in the tail
The Government has launched its latest consultation on statutory implementation of the business rates appeals system reform: Check, Challenge, Appeal and there is a major sting in its tail.
Aimed at businesses, local authorities and other interested parties such as yours truly, it is of a relatively short duration, with all responses to be in by 5pm on 11 October, 2016.
It is a 30-page document, which is stretching my powers of literary reduction, however, check the language very carefully of Point 6 – the phrase “reasonable professional judgement” is used which should ring alarm bells for anyone who has dealt with the Valuation Tribunal England (VTE). Anyway, I don’t want to spoil the surprise so read on….
In essence it is asking for yays, nays and comments against a host of proposals which I have listed below:
- The overall planned regulation structure including new incentives and time limits for the various stages
- The more controversial introduction of a fee structure for any appeals lodged. They are proposing £150 for small businesses and £300 for others.
- Penalties for supplying false information – £200 for small businesses and £500 for others.
- A tailored appeals package aimed at small businesses – fast tracking for example. The definition of a small business is proposed to mirror the ‘micro business’ in the Small Business, Enterprise and Employment Act 2015: namely those with a headcount of staff of less than 10 and a turnover or balance sheet total of less than £2 million.
- A new approach in dealing with Material Changes in Circumstances including the establishment of a “Material Day”. The ratepayer should have to submit a Check as soon as possible after the MCC event. This will set the ‘Material Date’ for any change. They also propose a 16-month period to submit a Challenge using evidence gathered during that period.
- Views on the amended approach to determining appeals against valuations. This is based on the premise that VTE, in considering an appeal, should order a change in the RV where their view is that the valuation is outside the bounds of “reasonable professional judgement”. In cases where the VTE consider the extant valuation is within the bounds of reasonable professional judgement, no change will be made to the valuation.
- Views on the modernised role of Local Authorities with more statutory rights included for LAs within the information exchanges of the reformed system.
The Government is proposing that the VTE, in considering an appeal, should order a change in the rateable value only where their view is that the valuation is outside the bounds of reasonable professional judgement. In cases where the VTE consider the extant valuation is within the bounds of “reasonable professional judgement,” no change will be made to the valuation.
Going back to Point 6 what is ‘reasonable professional judgement’?… 5%, 10%, 20%… The Government’s proposal fails to acknowledge the life of a rateable value. How is natural justice served when perhaps the VTE may determine a reduction in a rateable of say £5,000 resulting in savings over the life of the List of circa £12,500 and then in the next breath determining that the saving is not big enough to warrant a correction!
If that does not pour ‘oil on the fire’ where the ratepayer has already paid a fee to lodge his appeal I do not know what will.
Following this latest consultation, the Government intends to lay before Parliament regulations implementing the agreed approach by the end of the year. Subject to Parliamentary approval, the reformed system will come into force from 1 April 2017, to coincide with the national revaluation of rateable values. The amended Regulations will apply only in relation to a rating list compiled on or after 1 April 2017.
Well, back to wet Wales and a glass of wine before my holiday is totally ruined.
This week saw business rates rise again, with the multiplier increasing to 50.4p in the pound – a hit many companies could do without.
It is looking like the Scottish Government is to follow in English footsteps by making business rate revaluations more frequent.
The appeals centered on two business rates avoidance schemes where the properties were vacant and liable for unoccupied rates.