A taxing issue: Government slated over 15% ‘margin of error’ proposal

Business rates reform may be a done deal as far as the Government is concerned but it seems big business is reluctant to let go of the issue quite so easily.

During the summer recess, some of the biggest UK brands seem to be taking advantage of the quiet news season, claiming the Government ignored the concerns of businesses as it pushed through reforms to the appeals system.

Last year hundreds of individuals and companies, myself included, responded to proposed changes to the appeal system. One of the more contentious elements was to allow the government to reject appeals which disputed a valuation that was within an error of roughly 15%.

The government received 287 responses but none backed the change, according to later analysis of the submissions. Some submissions from companies such as Boots, BT and Tesco, to name a just a few, were particularly blunt and to the point in their objections.

In one submission seen by the media outlet City AM, Boots said it was “disappointed” with some aspects of the reforms “despite the strong representations from businesses”.

BT didn’t pull its punches in its statement: “BT does not believe that the proposed policies will deliver an improved rating system for the benefit of business; the policy changes will have the opposite effect.”

And Whitbread, owners of Costa Coffee, wrote: “This lack of transparency makes the system unfair. In the introduction to the latest consultation paper, we read that ‘under the formed system, businesses will be more confident that their valuations are correct.’ This is incorrect.”

Damning words but I would have thought it more newsworthy to actually find businesses supporting a reform that allows a 15% margin of error in the Valuation Office Agency’s favour?

Can you find or even imagine another area of taxation that allows for a 15% margin of error? Possibly in Donald Trump’s own approval ratings but certainly not in the tax world.

A spokesperson for the Department for Communities & Local Government said the government had addressed many of the concerns raised, and the appeals process allows a tribunal to decide if a current valuation is “reasonable”. I’m sure we have nothing to worry about then…