Bruton Knowles' on Business Rates Assessments 

Since the start of the 2017 Rating List, Bruton Knowles has lodged a significant number of challenges to clients’ Business Rates Assessments across England and Wales.

However, according to the national property consultancy, the current appeals process requires an urgent review and overhaul due to severe delays to response times from the Valuation Office Agency creating not only a backlog, but penalising ratepayers’ cash flow.  The system is prejudiced against the ratepayer and unfit for purpose. 

Ashleigh Phillips, Partner at Bruton Knowles, adds his voice to the growing campaign to overhaul the VOA’s ‘Check, Challenge, Appeal [CCA]’ process.

The VOA’s system is simply not working and is clogging up quickly. According to the VOA official figures, the submission of Checks into the system in March 2019 had reached 6,000 per month, with Challenges going in at a rate of 1,400 per month. There are already over 17,000 outstanding cases to be dealt with and that number is only going to increase. It is common for Bruton Knowles to be waiting nearly a year for a response to a Challenge, which is unacceptable for our clients.

Government agencies should provide a ‘fit’ and ‘fair’ service. The reality is far from this. The CCA process is incredibly onerous on ratepayers and their advisors. It is cumbersome, overcomplicated, with a poor online portal which is particularly challenging for ratepayers with multiple properties who must complete each registration separately. Despite best intentions, CCA is actually a retrograde step in its current guise.

It is quite clear to those who advise on Business Rates issues that the new system has been designed to be deliberately cumbersome, so as to discourage ratepayers from appealing. It requires expertise to navigate the system. The result is that ratepayers are having to employ experts, such as Bruton Knowles, to assist with even the most basic amendments to rateable values.

However, Bruton Knowles’ concerns run deeper. There has been a significant shift in the Valuation Office’s approach to resolving appeals. In previous Rating Lists, experienced valuation officers were happy to negotiate and ensure that any revised valuation agreed was fair. There was transparency and accountability. Sadly, the new appeals system can only be conducted in writing to an anonymous email box, and rather than be willing to discuss the valid reasons for an appeal, case officers who could be based anywhere in the UK, are using even the most spurious reasons to push back. This is leading to further delays in resolving cases. The lack of local knowledge in some cases is concerning and the over-reliance on potentially flawed lease data supplied by ratepayers, without analysis is a worrying trend.

The CCA system is a barrier to fairness and transparency. Those who can afford services, like Bruton Knowles, can receive expert advice and guidance on how to make the best out of a difficult and cumbersome system. But those who can’t afford agent fees or are intimidated by the VOA’s appeal process, are left stranded.

The call for a drastic overhaul

It is encouraging that in addition to leading figures in the surveying profession, many large businesses and organisations are now lending their voices to the campaign for a drastic overhaul of the system, raising awareness of the VOA’s procedures and backlog of appeals. The British Retail Consortium have warned ‘the backlog in the appeals process is yet more proof the business rates system is in desperate need of reform.’

Bruton Knowles fully supports these calls for change. Whilst in principle, CCA provides a framework for dealing with appeals against rateable values the system needs an overhaul, to include:

• Removing the “Check” stage;

• Imposing time limits and KPI’s on the VOA to respond;

• Allocation of appeals to a local VOA office and a return to the previous allocation of appeals to an individual Valuation Officer.

However, whilst Government departments remain focussed on Brexit and continue to insist that all is well with CCA, in the short term however, this doesn’t offer much hope to those already stuck in the appeal system or thinking about an imminent appeal.

The larger business rates landscape has been brought into focus with retailer CVA’s and the impact on the budgets of local authorities reliant on that income. The high street vs online issue and rates payable has been well aired, as has the frequency of revaluations and overall tax take from business rates and other business taxes. Business Rates is clearly a mess at the moment at every level and from every perspective.

Going forward, the whole system must change and radically. Calls have been made to suggest that business rates should in fact be reviewed every year so that rateable values are more responsive to market conditions. However, there should be grave concerns if rateable values are changing more quickly than the time taken to resolve appeals. This could result in an ever-increasing backlog.

Greater funding should also be put aside by the government to push through the backlog of VOA appeals. Although new legislation is intended to reduce appeals, it could in fact have the opposite effect and bring about more frequent appeals.

A complete overhaul of the business rates system is urgently required – in its current state, it is both stifling and distracting British business in challenging times. We need to have a proper conversation about the practicality of business rates. The system must be changed, how we put it right is up for debate, but we do need government to listen to ratepayers and their professional representatives next time around.