Rates appeal system ‘not fit for purpose’

Richard Wackett of Montagu Evans
Richard Wackett of Montagu Evans

A North West chartered surveyors and property consultants has waded into the Fylde coast business rates row saying that the Government’s appeal system is not fit for purpose.

Richard Wackett, partner at Manchester-based Montagu Evans, said the appeals system had “frozen” in the wake of the Government’s new approach of Check, Challenge Appeal against the new valuations of business rates which have left many businesses across the country facing rises of well over 100 per cent.

The rises could damage businesses, but problems and delays in appealing could put a strain on their future.

He said: “it has proven hugely frustrating to business ratepayers using the Valuation Office IT system which they have discovered is not fit for purpose.

“As of the end of April there had been less than 100 initiations of the ‘check’ stage because the IT access for ratepayers and their representatives does not work.

“Before the revaluation the VOA was receiving over 8,000 per month and in the last month of the ‘old’ regime (the 2010 list) there was a deluge of in excess of 50,000 appeals.

“The past 6 months have been littered with ‘research’ suggesting that a particular property sector or region will be damaged, hard hit or even destroyed by the publication of the new rating list.

“Time will tell whether the revaluation, rather than the macro economy, has such a dramatic effect but perhaps the time is right for a ‘time out’ to examine the likely effects of rates on business across the UK business will need to carefully consider the business rates ramifications along with an impending general election, a fast moving post-Brexit world and a sense of perspective will assist.

“The rating hypothesis is an objective test of rental value at an historic date. At the 2017 revaluation rates are supposed to reflect rental value at April 1, 2015 for all commercial and industrial premises.

“If a market improves and rents rise so will rateable values and if demand falls and rents decline rates should follow.

“Essentially rates are a function of rental markets. Rent and rates are however intrinsically linked and an increase in rates (at a revaluation) will affect rents.

“Certainly the lack of rental inflation across the North West and the serious decline in some town and cities has made matters difficult for those (particularly in the retail sector) who are hooked on historic rents despite a clear decline in value.”

And he added the fall in rents since 2008 meant that, for some, decreases over 20 per cent in rateable value will not fully benefit the ratepayer before the next planned revaluation in 2022.”