Financial penalties on the way for errors in challenging rateable values

March 2018

Businesses already struggling to come to terms with the complexities of the 2017 rates revaluation process now face financial penalties for errors in trying to challenge the system.

Adrian Smith, founder of Hull-based AS Rating, said on top of the inflation-led increase in rates bills many businesses are also suffering financially because of the complications around the new system. He also warned that recommendations from the House of Lords could lead to the maximum penalty being increased.

Legislation currently going through Parliament will authorise the Valuation Office Agency (VOA) to charge up to £500 from anyone who “knowingly, recklessly or carelessly” provides false information as part of the check, challenge, appeal (CCA) procedure.

The House of Lords voted in favour of the legislation which would bring the introduction of penalties of £200 for small businesses and £500 for all others, but in doing so they urged an increase in the upper limit, which they considered to be insignificant for large businesses.

The House also highlighted problems with the 2017 revaluation process and the CCA procedure. Lord Bourne of Aberystwyth said he would write to the VOA to ensure they are working with businesses and agents to minimise any burden and to ensure that guidelines are being issued about the circumstances in which penalties will be imposed.

The Earl of Lytton, a property consultant and vice president of the Local Government Association, said the risk of businesses incurring a penalty is high because of the complexities around CCA.

By the end of December 2017 the VOA had not received any appeals from the revaluation which took place in April 2017. The current figure is three appeals, but there are still around 200,000 outstanding from the 2010 revaluation.

Adrian said: “No one should be fooled into thinking that the absence of appeals means everyone is happy. Where the VOA says a case is resolved it merely means they have made their decision, so some of those may progress to the appeal stage.

“The figures generally show that the system is slow and cumbersome, and businesses are finding it very difficult to come to terms with the registration process. We would expect the number of challenges to be lower than in 2010 because that’s the whole purpose of the change, but the problem is that a lot of people who have genuine cases are being deterred from pursuing them and may be paying thousands of pounds more than they should.

“The introduction of penalties for providing false information is yet another deterrent.”