A long-awaited review by HM Revenue and Customs into business rate appeals in England has upheld criticism of the new system saying it “fell short of expectations” and “lessons need to be learned”.
The findings come at a time when retailers blame the tax for the growing number of high street closures with The Centre For Retail Research saying 18,248 retail jobs have now been lost in the first 2 months of the year.
The Valuation Office Agency launched ‘Check. Challenge. Appeal’ in England back in April 2017 in support of the Government’s aim of reforming the rating appeal system but there had been complaints from business and trade bodies that the new system was a bureaucratic nightmare, replete with red tape and an online portal that was not fit for purpose.
By the end of December last year, 164,050 premises liable for business rates such as shops, pubs, offices and restaurants, as well as public sector buildings, had lodged Checks and Challenges compared with 475,340 for the corresponding period after the 2010 revaluation.
The review announced by the former Financial Secretary to the Treasury, Mel Stride, back in October 2018 found “external concerns were justified” with lead reviewer, Josina Bowering, admitting that “the CCA online system had limited functionality when it was first launched and fell short of expectations”.
Bowering also warned “at a time when the VOA is being asked to do more each year, it is also facing challenges both in terms of having sufficient qualified valuers within the agency and also with modernising its technology.”
The Government said that “the previous appeals system did need to be replaced” adding “there were large numbers of purely speculative appeals made with little or no evidence which slowed the system.”
Improvements have since been made simplifying the registration process as well as introducing new functionality to the online portal.
Alex Probyn, UK President of Expert Services at Altus Group, said it was absolutely right that valid concerns had been acknowledged but it was fair to also recognise that efforts had been made to improve the system but urgently called for more resources to speed up the process adding:
“During the last financial year the Valuation Office Agency struggled to meet its own targets being asked to do more with less and, by the end of last year, outstanding Challenges had increased by more than a fifth. In what is the final year of the Rating List, numbers should be falling at this point. With around 215,000 registered ratepayers yet to start the process, delays could become chronic with an anticipated surge in appeals expected as we come to the end of this cycle. But this needn’t happen and can be fixed. We are working with the agency to see how the settlement rate can be improved and we urge them to engage because it is only businesses and ratepayers that are suffering”.
Councils across England estimate the cost of business rates appeals will be £927 million during 2020/21.