Your Shout: Business rating update

28 January 2005 by
Your Shout: Business rating update
by Jerry Schurder of Gerald Eve
The Office of the Deputy Prime Minister (ODPM) published a consultation paper on its rating appeals proposals last week that allows just six weeks for businesses to respond. The proposed changes on appeals are intended primarily to help the Government's bid to reduce the numbers of appeals lodged by some 180,000. These changes are far too radical to be rushed in without proper consideration. The short consultation period allows no time for the ODPM to consider responses properly because of the need to get the regulations through Parliament by 1 April. The regulations currently in place have been amended nine times, rendering them unintelligible, and have often created unfair results for ratepayers. Rushing a new scheme through Parliament brings with it the risk of repeating the same problem. These planned changes to the appeals regime seem to have been inadequately considered. #### Time limits Most time limits for submitting proposals are to be removed. Ratepayers will be able to challenge the assessment for 1 April 2005 at any time during the following five years and any reduction would be fully backdated. Similarly, for any material change to a property or in its locality, ratepayers will no longer have to ensure that an appeal is lodged within the same rate year as the event in order for the reduction to be effective from the earliest possible date. This removal of time limits is a double-edged sword because valuation officers (VOs) will also no longer be restricted to an effective date within the same rate year as an assessment alteration. So VOs could wait years before entering a new or extended property in the rating list and then fully backdate the assessment. Ratepayers will need to accrue for potential rates liability increases over a far longer period of time than they do at present. The main benefit of the removal of time limits is that ratepayers and agents will no longer need to serve duplicate appeals just to ensure the Valuation Office Agency (VOA) has received at least one within the statutory time limit. #### Limiting appeals This change will limit ratepayers to a single appeal per event during the five years of the 2005 revaluation. The main concern with limiting the number of appeals is that it will encourage "cowboy" rates advisers to make blanket appeals for ratepayers who have not instructed them. With only one opportunity to appeal, companies might be persuaded that they have little option but to instruct the rogue adviser if they wish to make savings. Many will be taken in by this aggressive sales tactic, even though the appeal was not valid, strictly speaking, as the maker had no authority to lodge it. Even if the business has instructed a professional to represent its interests, there will be huge administrative problems. The VOA will accept as valid the first proposal it receives, and any subsequent one would be returned as invalid. If the rogue adviser appeals first, the instructed professional's appeal will be rejected as invalid if it arrives later. Instead of spending time usefully negotiating on values, agents, VOs and the valuation tribunals will be embroiled in invalidity appeals. The change has the potential effect of encouraging ratepayers to appeal all assessments early so as to ensure theirs is the first proposal made - in direct contrast to the Government's aims and to the VOA's modernisation and "right first time" agenda. #### Rental information The third key change is "a sledgehammer to crack a nut". Ratepayers will need to provide details of their current rent (or licence or easement fee) and the dates when it first became payable and will next be reviewed. Small businesses in particular will regard the information requirements as another piece of Government red tape, designed to make it difficult for them to exercise their appeal rights. While they may know the rent payable, they probably don't know when it was first paid and will next be reviewed. They will need to ask their solicitor to dig out the lease for this information and will be indignant if this is the second time they have had to do so, the first being some months earlier on receipt of a VOA form requiring information under the threat of a fine. If the VOA doesn't have any rental details, will the three pieces of information included with the proposal suffice? Probably not, in which case a full rental request form will be issued in any case. []( [
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