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For those of you who are in business, you will be aware that a revaluation of the ratings list comes into effect from 1 April 2017, with many businesses, particularly in the south-east of England, braced for an increase in their business rates liability. The draft 2017 Rating List was published on 30 September 2016 and is available to view.
Business rates are a tax on the right to occupy commercial property. They are one of the largest overheads for businesses. Understanding your business rates liability, and ensuring it has been correctly assessed, is imperative in the successful operation of a business.
Whilst the 2017 revaluation has received wide coverage, the Valuation Office Agency will also be introducing a new procedure to deal with business rates appeals. From 1 April 2017, business rates appeals will operate on a new ‘Check, Challenge, Appeal’ system:-
The first stage of the new system is for the ratepayer to check the relevant facts upon which the Valuation Office Agency has based its revaluation.
Any facts that can be agreed will be updated on the rating list. If there are any facts that cannot be agreed between the ratepayer and the Valuation Office Agency, those disagreements must be clearly identified.
The second stage allows the ratepayer to challenge their ratings list entry. The challenge must be submitted within 4 months of completion of the check stage.
To make a challenge, the ratepayer must establish:-
1. the grounds for the challenge;
2. substantive reasons for the challenge, backed by supporting evidence; and
3. an alternative valuation which is supported by evidence.
The evidence should provide an explanation of the basis for the alternative valuation. The ratepayer will need to make a full disclosure of all the evidence and arguments that they wish to rely on for their challenge as new evidence or amendments to the challenge will not be automatically accepted.
If an agreement cannot be reached between the ratepayer and the Valuation Office Agency, the ratepayer can proceed to the final stage of the process.
The final stage of the new process is for the ratepayer to appeal to the Valuation Tribunal for England.
The Valuation Tribunal will consider the evidence that was before the Valuation Office Agency during the challenge stage and will assess whether the Valuation Office Agency had correctly determined the challenge.
Preparing for the new system
Since the publication of the last ratings list in 2010, the Valuation Office Agency has begun a program of office closures as part of a strategy to create 25 ‘hubs’ across the country by 2020. With strict time limits in place on each stage of the ‘check, challenge, appeal’ process and an emphasis on the ratepayer having to overcome greater evidential burdens in submitting an appeal of their business rates listing, only time will tell whether the reformed business rates appeal system is fit for purpose.
What remains clear is that understanding the Valuation Office Agency’s assessment of your business rates liability and establishing whether you have any grounds for appeal, ahead of its implementation on 1 April 2017 is essential. Only one ‘check, challenge, appeal’ is permitted for each ground of challenge, so we strongly recommend that you seek professional advice when assessing your business rates position.