Check, Challenge, and Appeal – how to claim back savings on business rates

Business rates continue to be in the news.

 

When the concept of the national non-domestic rate was introduced in 1990, it replaced a system where each local authority chose its own rate in the pound. The new system was supposed to be simple, with the rateable value representing the rental value and there being a single rate in the pound. However, the system was not as simple as planned, with transitional relief included from the very start to protect businesses with a large increase in their rate liabilities by subsidising their bill. It was paid for by not reducing the liabilities of those hoping to see a reduction in their bills as much as they should have been.

 

Ever since then, the system has been subject to meddling in reaction to the latest media frenzy - with the result that we now have five different rates in the pound in England alone, multiple different reliefs and, in some areas, supplements. It’s no surprise that confusion reigns.

 

What can be done?

Businesses who are concerned about whether their liability is correct need to: 

• Check the rateable value – does it appear close to the rental value?
• Check the rate in the pound – has the right one been selected (the options should be on the bill)? 

If there is doubt about the rate in the pound, then businesses should contact the council, whose details will be on the bill.  Note that if the council agree the wrong rate in the pound is applied, they are unlikely to respond to the email; they will probably issue a new demand. That new demand is their answer to the initial contact.

 

If there is any doubt about the rateable value, then businesses need to look on the Valuation Office (VO) website.  For many properties, the valuation will be online, and there will be links to properties the VO considers comparable. 

 

Businesses should check this and, if concerns remain, then they should contact the VO. They are likely to want the business to register for their Check Challenge service.  This can be easier said than done.  However, once done, it is possible to query the rateable value - be aware, though, that there is only one chance to “challenge” the general assessment per rating list.

 

Alternatively, businesses can instruct an agent to act on their behalf. These can be found on the IRRV, RICS and Rating Surveyors Association (RSA), and it’s generally preferable to speak to a couple of agents and check their fee bases first. They should be able to give an indication of whether the bill is correct or not.  Businesses should ensure that the agent is a member of the RICS, RSA or IRRV before instructing them, and that the fee basis is clear.  Is there an administrative fixed fee? Is it a percentage of the savings? What is that percentage?  How long is the contract for?  Have they provided a copy of Appendix A of the Consultancy Code of Practice?  (Which is a requirement for RICS, IRRV and RSA registered agents)

 

If not instructing an agent and going down the self-help route, businesses will need to serve a “Check” on the Valuation Officer.  The “Check” stage is there to advise the Valuation Office of any change to the property compared to the facts in their valuation.  This could be a change to floor areas, or the installation of air conditioning, for example.  There is no obligation at this stage to submit any evidence to justify a reduced assessment, and there is no restriction on the number of Checks that can be served.

 

Submitting a challenge

Once the outcome of the Check is received, it is possible to submit a Challenge. It is important to note that there is only the option to submit one challenge for any single event, so it’s essential to get it right.  All evidence has to be submitted with the Challenge, so it should state what the business wants the RV reduced to and contain evidence such as rents or other assessments as to why.  There are options to submit late evidence, but it’s not guaranteed to happen.

 

Appeals

If the Challenge is not resolved satisfactorily, then an appeal should be submitted. That is sent to the Valuation Tribunal, and there is a small fee payable – which is refunded if successfully granted a reduction. The panel is comprised of independent members who will hear both the appellant’s case and that of the Valuation Officer before coming to a decision.

 

In any case, ratepayers should discuss their position with near neighbours to ascertain their position, their tenure details, and whether they are also appealing. As a general rule, it is better to work with others to try and seek a reduction in the assessment.

 

Businesses may have heard that it is possible to mitigate business rates on vacant property by use of various occupation schemes.  Businesses should be aware that, following a number of court cases, there are risks involved with many schemes and they may no longer work, so taking professional advice is recommended before attempting these.

 

As the Prime Minister continues to tinker with reliefs and Business Rates remain high on the press agenda, businesses must remain agile to the potential changes. Keeping a close eye on rates and checking their RVs is essential to ensure businesses can claw back savings wherever possible. 

 

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Chris Grose is Rating Director at Hartnell Taylor Cook

 

Main image courtesy of iStockPhoto.com and Khanchit Khirisutchalual