Business rate appeals dip as industry warns of ‘complicated’ process

Frustrations over business rates were underlined this morning, with industry experts warning that new figures show the current process for appealing against property taxes is too complicated.

Government data released today shows that there were roughly 65,000 appeals to dispute business rates between 1 April 2017, when a new system was introduced, and 31 December 2018, slumping from 330,000 when compared with the same period seven years ago.

"Overcomplicated procedures, lack of guidance and a largely un-navigable new on-line portal are still discouraging those with good cases from challenging their bills," said John Webber, head of business rates at Colliers International.

Calls for the government to reform business rates have been mounting from the retail and property industry in recent months, with many bricks-and-mortar firms arguing that the property tax is adding greater pressure to an already embattled high street.

New rateable values, which are an estimate of a property’s annual rent on 1st April 2015, came into effect on 1st April 2017, and are the basis of the calculation for business rates bills until 2021.

Read more: MPs launch inquiry into impact of business rates on high street retailers

"The collapse in appeal numbers is evidence of an emerging tragedy, with the system’s complex and onerous demands deterring a huge number of businesses from pursuing legitimate challenges," said Jerry Schurder, head of business rates at Gerald Eve.

Schurder added: "It is nothing short of a scandal that the government has deliberately created a regime that is so burdensome it dissuades firms from claiming the refunds they are rightly due, and has so under-resourced the Valuation Office Agency (VAO) which has struggled to deliver functional processes."

However Alex Probyn, president of UK Expert Services at real estate adviser Altus Group, who’s firm lodged around one in six of all appeals, said: "Despite some valid criticisms of the new appeal regulations, the system works if you get stuck in and we continue to engage with the VAO on ways to help improve it. We increased our volume by 90 per cent in the third quarter of 2018 and the VOA are now clearing more Checks than they receive which has to be some positive news for business."

According to Altus Group, councils across England estimate that the cost of business rates appeals will be £1.1bn for the next financial year in 2019/20.