Viewpoint - 10/12/2015

Small window of opportunity for business rates refunds?

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Many businesses across the UK could still receive a full five years’ worth of refunds in respect of their business rates owing to a small window of opportunity in the current appeal system. However, there is an element of caution to be applied. Beverley McDougall, Director of Business Rates in Lambert Smith Hampton’s Manchester office, explains:

In his 2014 Autumn Statement, the Chancellor introduced a highly unpopular change to the backdating of business rates appeals and refunds, effectively removing ratepayers’ ability to claim backdated refunds of up to seven years. Instead, refunds from any appeals made to the Valuation Office Agency (VOA) after 1 April 2015 would only stretch back as far as this date.

Instead of its intended effect of reducing the backlog of appeals in the system, the changes resulted in a huge surge in appeals made before 31 March 2015, further exacerbating the problem!

However, it is important to note that, up until 31 March 2016, the VOA can still make alterations to the 2010 Rating List which can be backdated to an earlier effective date – potentially as far back as 1 April 2010. 

This has two ramifications:

If it can be identified that a Rateable Value is incorrect and too high, there is a small window of opportunity between now and 31 March 2016 to request that the VOA alter the Rating List back to an earlier effective date. While the VOA is under enormous pressure in dealing with current outstanding appeals and preparing for the 2017 revaluation, it does have a statutory duty to maintain a fair Rating List. Therefore, if an error in a rating valuation can be identified and is demonstrable, then every opportunity to try to secure an earlier effective date of alteration should be taken.  No guarantees are offered as we are at the mercy of their resources!

On the flip side, if a Rating List entry is wrong and too low by virtue of, say, an alteration or extension which has not been identified and picked up by the VOA or, indeed, if the whole property has not been assessed for business rates, the VOA has until 31 March 2016 to rectify this with backdating to the appropriate effective date up to 1 April 2010. After 31 March 2016, they are restricted to 1 April 2015. This could potentially have very serious consequences for an organisation which may find itself landed with a substantial (and unbudgeted) bill for backdated business rates.  

Given the complexities involved, occupiers who believe that any of these circumstances are applicable to them are urged to seek professional advice from a qualified Rating Surveyor.


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