Confusion reigns over plans for reformed appeals process
An industry-wide letter has been sent to the Joint Committee on Statutory Instruments concerning proposed changes to the business rates appeals system. New Regulations governing rates appeals are proposed to come into effect from 1 April 2017.
However, the Regulations have yet to be laid before Parliament. Further, the Department of Communities and Local Government (DCLG) has failed to respond to the outcome of its own consultation on the appeal changes which closed on 11 October 2016. The situation is now time critical with the 1 April 2017 Revaluation about to come into effect at the same time as the new appeals regime.
Dentons, a top 20 firm on the Acritas 2015 Global Elite Brand Index, are extremely concerned that DCLG has not commented on the consultation and that there is complete uncertainty surrounding what is happening with the new appeals regime.
The industry letter places particular focus on the inherent uncertainty in only permitting a change to the ratings list where the rateable value is shown to be ‘outside the bounds of reasonable professional judgment’. There is no indication of how this would be interpreted. It could in theory allow a 20% margin of error. That means an appeal will fail unless the determined Rateable Value is outside the bounds of what the Valuation Tribunal considers to be reasonable professional judgment.
These proposals fly in the face of the current obligation of the Valuation Office Agency to maintain an accurate ratings list. The Valuation Tribunal should determine what the actual rateable value is, not result to assessing whether or not the actual Rateable Value falls within a wide margin of error. The consequence of this will be that a property which the Valuation Office Agency assesses to have a Rateable Value of £1,000,000 could have an actual Rateable Value of circa £800,000, yet the Tribunal would not be able to alter the value unless it considered this to be outside of reasonable professional judgment. This system is unreasonable and flawed.