An industry-wide letter has been sent to the Joint Committee on
Statutory Instruments concerning proposed changes to the business
rates appeals system. New Regulations governing rates appeals are
proposed to come into effect from 1 April 2017. However, the
Regulations have yet to be laid before Parliament. Further, the
Department of Communities and Local Government (DCLG) has failed to
respond to the outcome of its own consultation on the appeal
changes which closed on 11 October 2016. The situation is now time
critical with the 1 April 2017 Revaluation about to come into
effect at the same time as the new appeals regime.
We are extremely concerned that DCLG has not commented on the
consultation and that there is complete uncertainty surrounding
what is happening with the new appeals regime.
The industry letter focusses in particular on the inherent
uncertainty in only permitting a change to the list where the
rateable value is shown to be 'outside the bounds of reasonable
professional judgment'. We simply do not know how this would be
interpreted. It could in theory allow a 20% margin of error. That
means an appeal will fail unless the determined Rateable Value (RV)
is outside the bounds of what the Valuation Tribunal considers to
be reasonable professional judgment.
Bryan Johnston, Head of Property Litigation at Dentons in
London, comments: "This flies in the face of the current
obligation of the Valuation Office Agency to maintain an accurate
ratings list. The Tribunal should determine what the actual
rateable value is, not engage in assessing whether or not the
actual RV falls within a wide margin of error. The consequence of
this is that a property which the VOA assesses to have a RV of
£1,000,000 could have an actual RV of c. £800,000, yet
the Tribunal would not be able to alter the RV unless it considered
this to be outside of reasonable professional judgment. There is no
reasonableness in this flawed system."
Business rates is an issue of primary concern to the property
industry. The spotlight will be very firmly on it in the run up to
revaluation and beyond.
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