Business groups have joined forces to fight the government’s business rates plans
Thirteen business groups and industry associations including the Confederation of British Industry, British Chambers of Commerce and British Retail Consortium have formed a united front to fight the government's proposed changes to business rates.
Commercial property taxes have been re-evaluated for the first time in seven years and are set to soar for many firms across the capital from 1 April.
The government is also changing the mechanism by which businesses appeal against its valuations.
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It has proposed a “reasonable professional judgement” provision in draft regulations reforming business rates, due to go before parliament before April.
This would mean that ratepayers would not be allowed to appeal an incorrect business rates valuation if it were inside a “reasonable margin” of error. The reforms, which would come into force from April if approved, could see major firms left overpaying on their rates bills and unable to challenge them.
But advisors at Cushman & Wakefield, Daniel Watney and Gerald Eve have argued in a letter to the government, published today, that officials have not defined what is “reasonable”.
In addition, they say the Local Government Finance Act 1988 does not permit the government to ban appeals on the basis of disputed accuracy.
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Trade bodies representing retailers, SMEs and pubs have signed the letter, penned by law firm Berwin Leighton Paisner, which questions the legality of the proposed changes.
They have demanded that the offending clause be taken out of the new regulations.
John Webber, head of rating at Colliers International, said an “unchallengeable” error in business rates valuations would “pile tens of millions of pounds on to the business rates bill”.
“At a time when many firms, particularly in London and the south east, can expected their bills to skyrocket, this adds insult to injury,” he said.
A government spokesman said: “These claims are simply false. We are not preventing anyone from appealing their bills, or setting any margin of error for appeals being heard.
“We’re reforming the appeals process to make it easier for businesses to check, challenge and appeal their bills, while at the same time generous business rate reliefs mean thousands more businesses are seeing a reduction. From April, 600,000 businesses will pay no rates at all.”
But because business rates are tied to the rental valuations, and as rents have jumped in London over the last seven years, firms in the capital are being hit particularly hard.