Proposed changes to business rates ‘unfair and unworkable', says ALMR

12 September 2016 by
Proposed changes to business rates ‘unfair and unworkable', says ALMR

One of the hospitality industry's leading trade bodies has described the Government's proposed changes to business rates "unfair and unworkable".

The Association of Licensed Multiple Retailers (ALMR) added that the changes would potentially cost businesses thousands of pounds.

Businesses could be forced to pay up to 20% higher business rates than they should, without any right of appeal, under new government proposals revealed in draft regulations for England put forward by the Department for Communities and Local Government last month. It was revealed last month that the Valuation Office Agency, which deals with appeals to business rates, is struggling to keep up with the volume of submissions.

The new proposals suggest that, from April 2017, Valuation Tribunals should only order a change in the rateable value of a property if the valuation is "outside the bounds of reasonable professional judgement", the margin of error for which can be as high as 20%. As a result, the biggest ratepayers could be tens of millions of pounds out of pocket.

The ALMR has written to the Department for Business Innovation and Skills opposing the new guidelines.

ALMR chief executive Kate Nicholls said: "The proposed changes to the appeals system are unfair, imprecise and potentially unworkable in practice. The ALMR has written to the BIS to highlight this point and to urge a rethink against such a last-minute development.

"The new guidelines revolve around the idea of ‘professional judgement' regarding valuation. Clearly, such a subjective notion is going to cause problems and inconsistencies throughout the process and across the entire system. There is no indication of how professional judgement is to be assessed, how it will be implemented or what margins of error permitted.

"We also have the added problem of pub valuations being based on hypothetical fair maintainable trade. Additional scope for interpretation will only increase the probability of error in the system. A potential dismissal of the appeal on such vague grounds will only add to the disincentive to resolve through mediation. At a time when the appeals process is already placing additional financial burdens on businesses, unclear complications such as these are an extra, unworkable burden."

The Government's consultation closes on 11 October.

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