According to rating experts at Colliers, the latest business rates appeal figures reveal that the business rates system, especially the Check Challenge Appeal Business Rates Appeals System (CCA), is not working efficiently. Many businesses, primarily in the hospitality and retail sectors, rushed to register their appeals as the 2017 Rating list was drawing to an end.
As per government statistics, 845,670 Checks were registered over six years of the 2017 list, with 16% of these registered in the last quarter alone as businesses tried to beat the deadline. This was approximately seven times higher than the number of checks registered in the previous quarter. Consequently, the number of outstanding checks by the end of March rose from 10,610 to 97,610, pointing to disquiet among businesses regarding their business rate bills.
John Webber, Head of Business Rates at Colliers, indicated that these high figures highlighting the dissatisfaction of businesses with their rates bills would require significant effort and resources from the Valuation Office Agency (VOA) to resolve. However, Webber states that this proves that the Check Challenge Appeal (CCA) system has not been the answer to this issue that the VOA had claimed it would be, and there is a need for a reform of the business rates system in general.
According to government data, there were 1.085 million appeals registered between the seven years of the 2010 list. CCA was introduced to stem the tide of these demands but proved so convoluted and complex that many businesses gave up, bogged down in the new appeal system. As Webber points out, “the system isn’t working, and businesses still remain bogged down.”
The current figures for 2017 could have been worse if businesses had not received two-year rate holidays due to the Covid pandemic and if the government had not outlawed millions of appeals due to material changes in circumstances. Webber adds that even with all the obstacles in place, businesses continue to challenge their assessments in significant numbers, demonstrating their dissatisfaction with the current system.
Webber believes that the transparency of how bills are calculated is at the root of this issue, along with high rates, stating that “the burden of business rates is too high…shocking numbers of people are appealing their assessments.” Therefore, while the CCA system was brought in to resolve this problem, the latest statistics reveal that a comprehensive reform of the business rates system is warranted to address the wider issues at hand effectively.
