Fundamental Changes to Business Rates Appeals

Alongside the Enterprise Bill provisions reported elsewhere within our News articles, the Government have now issued some detail and consultation on the way they see the Appeals system operating from 2017.

Responses are due by 5pm on 4th Jan 2016 and the whole paper can be viewed here.

The rationales behind the changes are to increase understanding and confidence of ratepayers and to allow factual and valuation issues to be dealt with in a timely and efficient way. The end result will be “Check, Challenge, Appeal”

This will be a 3 stage process.

Briefly, the Check will be to ensure the relevant facts are validated and agreed. Ratepayers are limited to one check per Rating List, although a subsequent change of RV or a Material Change of Circumstances will permit a further check. The Valuation Office Agency (VOA) will be allowed up to 12 months to complete the check stage before the challenge stage can be invoked.

The Challenge must take place within 4 months of the check being completed (or can be invoked by the ratepayer, if the check remains unresolved a year after it is started). In making the challenge, the ratepayer must set out their grounds, a valuation and all of their evidence/justification. The ratepayer will be limited to the evidence submitted at this stage, if the matter proceeds to Appeal. This burden is particularly onerous on the ratepayer in relation to recent changes in the property/locality. The VOA will be allowed up to 18 months to complete the check stage before the challenge stage can be invoked. The ratepayer must invoke a trigger point under a time limit in order to move to appeal, if the challenge remains outstanding after 18 months and a time extension has not been agreed.

The Appeal stage changes are fundamental. There will be an application fee involved (possibly £100 – £300 per case), which will add to ratepayers’ costs. The VOA will not undertake any further discussion after appeal is triggered and the basis of the Valuation Tribunal decision of the appeal will be “whether the decision taken by the VOA in their decision notice at challenge stage was reasonable?” This is substantially different from “is the value right or wrong?”
Subsequent appeals to the Upper Tribunal (Lands Chamber) will be on the basis of points of law only. Prior to now, appeal was always possible on valuation and points of law.

Whilst any new system takes time to bed in, the time limits are a major concern. We are potentially looking at 2.5 years before an appeal even gets on a list to go to VT. The whole success of the new system is based on small numbers proceeding to the appeal stage, but our experience of the 2010 List suggests that most appeals will go that far unless the VOA dramatically improve the quality/amount of resource they devote to an appeal, as seen by what is happening currently in terms of the Programming and Statement of Case procedures.