The 2017 Revaluation

From the 1st of April 2017 all commercial premises in the United Kingdom will have new Rateable Values applied. A draft Rating List is released in October 2016 to allow businesses to plan in advance for any substantial changes.

In addition to this there are significant changes to the existing appeal system with a move to a model known as “Check, Challenge, Appeal”. These stages are all summarised below.

What will it mean for my business?

As you may be aware a Business Rates appeal can take a significant amount of time. These stages, at first glance, will not speed the process up!

There is a 12 month time limit on the Check stage and an 18 month time limit on the Challenge stage. Therefore, it would be 2 ½ years before an appeal makes it to Tribunal and then there would be a further wait to be heard at tribunal.

In short the delays will be significant and not unlike those experienced at present. However it will allow the Valuation Tribunal to clear their significant backlog. So in theory the wait to be heard at Tribunal should be shorter (it can currently be over 12 months). Only time will tell if this is the case.

Check

This initial phase has both parties (the Ratepayer and the Valuation Office Agency) exchanging details such as areas and passing rent on the property.

A 12 month time limit on this phase is proposed with civil penalties for the provision “carelessly, recklessly, or knowingly” of false information. Information has not yet been properly defined but must “reasonably relate” to the grounds of the proposal.

Where material errors, e.g. a floor area, are identified we would expect the Valuation Office to correct these during this phase. However, in situations where the relevance of a rent is contested (for example) we would expect a simple progression to the Challenge phase.

Challenge

This must be instigated by the ratepayer within 4 months of completion of the check stage.

In this stage the appellant must provide grounds for the challenge, an alternative valuation and substantive reasons for challenging the Rateable Value. These grounds must all have supporting evidence.

The Valuation Office Agency (VOA) will then make a decision on whether the information provided is sufficient to be accepted as a challenge. At this stage it is not clear exactly what the VOA expects! If they feel more information is required the challenge will be returned to the appellant with the opportunity to provide further information.

The VOA will respond with "proportionate" evidence and the appellant will have the opportunity to respond. It is unlikely the VOA will issue the full evidence upon which the assessment is based in which case a successful outcome will rely on the skill and knowledge of the rating surveyor.

The challenge phase has a proposed backstop period of 18 months.

Appeal

If the challenge remains unresolved the last stage in the process, appeal, can be invoked. The proposals as they stand will require a fee (£300 or £150 for a “small proposer”) to move to a Valuation Tribunal hearing. The Valuation Tribunal will be limited to only considering evidence brought forward in the check and challenge stages. This is unless there is information that has arisen that could have not previously been known.

Conclusion

There are various concerns over the new “Check, Challenge, Appeal” system. The assumption is that the current assessment is right and it is for the ratepayer to prove it wrong. There is no duty for the assessing body (the Valuation Office Agency) to explain its assessment. Unfortunately it doesn’t seem that the new system will do anything to improve transparency or make the average ratepayer feel that they are being treated fairly.

Most cases are based on a mixture of facts (i.e. “Check”) and valuation (“Challenge”) so it is unlikely the Check stage will weed out a large number of cases. In the “Challenge” stage the appellant must set out “why the assessment is not correct – for example the VOA has not taken into account specified relevant evidence”. But at this stage they won’t know what evidence the VOA is using! The “Appeal” stage will introduce a fee and this will only limit justice for smaller businesses. Then, if a case does reach Tribunal an alteration can only be made if it is “outside the bounds of reasonable professional judgement”.

Overall, the “Check, Challenge, Appeal” system is heavily weighted in the VOA’s favour. It is harder to navigate through and will disadvantage the unrepresented ratepayer.