Businesses brace themselves for rates increases and nasty surprises

February 2018

Businesses face being hit with higher rates bills as inflation bites – and there could still be shocks from a revaluation process branded a shambles by industry experts.

Adrian Smith, founder of AS Rating, highlights one client whose “Christmas card” from the Valuation Office Agency (VOA) was a notice that their rateable value (RV) had more than doubled in less than a year.

He warned that their situation will be hampered further by the ongoing delays with clearing the backlog of appeals.

Adrian said: “The delays in clearing the backlog from 2010 are not being helped by the complexity of the system set up to manage the changes of 2017 – the backdrop is one of job losses and office closures at the VOA. One industry analyst has likened it to closing a hospital because there are too many sick people to deal with.”

New rates demands will be issued during March to take effect from 1 April and will increase in line with the Consumer Price Index rather than the Retail Price Index – a move which is expected to reduce the rate of the increase by around one per cent.

Small Business Rate Relief is expected to continue but as 2018 dawned it was still not clear whether the government would extend the £1,000 relief for pubs with a rateable value of less than £100,000.

Of immediate concern to Adrian is the case of one client which saw its RV go up from £13,500 in 2014 to £18,500 in April 2017. Adrian and the business owner decided to wait and see before pursuing the check, challenge appeal (CCA) process – and were hit with another increase just before Christmas.

Adrian said: “The business received a notice that the new RV would be £29,000, backdated to October. We want to know how the VOA could come up with an increase from £13,500 at the beginning of 2017 to £29,000 by the end of the year.

“Why has the VOA conducted another review on a business which they have already reviewed? They should be concentrating on clearing the backlog of appeals from 2010 and the challenges from 2017.”

The problems are compounded by the fact that CCA is so cumbersome – Adrian has represented this client for several years yet still has to submit a fresh “check and challenge” for the new system, which could take 12 months to reach the appeal stage.

Adrian said: “In the coming months there will be more reviews by the VOA. That will lead to more requests for checks and to more challenges from people who think their rates valuation is unfair.”