Successful business rate appeals falling, new figures show

The percentage of successful appeals made by businesses in England and Wales contesting the rateable values of their premises to the Valuation Office Agency (VOA) has fallen, show figures just released [pdf].

Almost 2 million appeals were made to the Valuation Office Agency (VOA) against the 2005 and 2010 valuations up to 31 December 2016. More than a third (37%) of appeals against 2005 valuations have resulted in a change to the VOA’s decision. That number has reduced to 29% for 2010 valuations.

Of the 1,996,780 cases overall, 29% were resolved with changes made to the amount paid, while 13% remain unresolved.

Last week 13 major business groups, including the Federation of Small Businesses (FSB) and British Retail Consortium (BRC) wrote to the government to object to plans to make it harder for small firms to appeal their rateable value. The government proposes to introduce a “check, challenge and appeal” procedure [pdf] from April, to reduce the number of cases that reach the appeal stage.

David Gauke, chief secretary to the Treasury, suggested in a Radio 4 interview on Tuesday that a number of speculative appeals are being made which are clogging up the system.

“What we want to do is to reform the appeals process to improve it to ensure that where there are mistakes they can be addressed much more quickly and what we are trying to do is to discourage speculative appeals that give no justification or reason, just on the hope that they might strike lucky,” he added.

Businesses are waiting years for their appeals to be heard. The VOA still faces 780 complaints from valuations set on 2005 figures (which were implemented in 2007). Between October and December 2016, 15,910 appeals were submitted across England and Wales about 2010 valuations. The statistics show there is a backlog of 251,620 cases.

There have been warnings that the backlog will only get worse from April 2017, as the new rateable values are brought into force. The VOA has been hit by public sector cuts and proposals by the government to address the frequency of revisiting business rates are in doubt because of the agency’s inability to cope.

Business rates, which are based on a property’s rateable value, are revised every five years (although, controversially, the recent revaluation was delayed by two years in 2015), but there have been calls to reduce this to at least three years. Government analysis last year estimated that the agency receives 900,000 appeals for each revaluation.

Communities secretary Sajid Javid has announced that extra measures to help small firms affected by business rate rises this year will be announced by the chancellor in the budget on 8 March.

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