Massive surge in business rates appeals revealed

Business rates experts at Colliers International are calling for a radically different approach from the Government’s Valuation Agency (VOA) to cope with unprecedented volumes of appeals in what it is calling a “Wartime scenario”.

Figures released by the Government on the Check Challenge Appeal (CCA) Business Rates Appeals System illustrate the pressure on the Government’s Valuation Agency (VOA) to deal with appeals caused by a ‘Material Change of Circumstance’ following the Covid-19 pandemic. According to Colliers there now needs to be a radical re-think of approach before even more businesses keel over. The VOA's figures show that in England, in the three months to 30 June 2020, 144,910 of new checks have been registered, This is nearly the same as the three-year figure - announced three months ago - where in the period between 1 April 2017 and 31 March 2020, a total of 158,910 checks were registered. The new figures effectively double the total number of checks registered up to a massive 303,820 registered, of which 69,480 are unresolved. These figures do not take into account the number of new checks registered in July, where figures are also expected to be high. The massive increase in the number of appeals started is because of an increasing number of companies are claiming a ‘Material Change of Circumstance’ (MCC) as a result of the impact of Covid-19 on their businesses. This has impacted all sectors. In effect businesses are arguing that rental values have plummeted because of the effect of Covid-19 and as their rateable value should mirror rental values, these need to be adjusted downwards significantly. “Covid-19 has led to the biggest ‘Material Change of Circumstance’ the country has seen in rating history and the system has been around for over 400 years,” said John Webber, head of business rates at Colliers International. “You could say we are on a wartime footing. Webber is advocating a radical approach to deal with the crisis. “If the VOA takes its time and waits for all the evidence to come in, many businesses will simply not be around by the time it decides what to do. We urge for a collaborative approach with the VOA getting together with the ratepayers and their agents as soon as possible to agree sensible and fair reductions across the board to those sectors most impacted. This will be essential if businesses are to plan ahead and hopefully work through this crisis.” “Of course, if we suddenly see a V shaped recovery, the VOA could remove any extra allowances given - and businesses would pay more again - but for the moment we believe this outlook is unlikely.” Webber added: “With a delayed revaluation until 2023, the VOA will hopefully now have more resource to dedicate to making sure CCA works as best as it can. We cannot leave things to chance – or we will see more closures and job losses. The bloodbath has only just begun.”