Trade bodies have warned that the new business rates appeal system must not derail further ‘root and branch reform of the system.
The British Beer & Pub Association and the Association of Licensed Multiple Retailers have both responded to the Valuation Agency Office consultation on the reforms.
The proposals, incorporated in the Enterprise Bill currently going through Parliament, introduce a new system with three stages – ‘Check, Challenge and Appeal’. ‘Check’ involves a top-line look at how the rateable value is calculated and allows businesses to point out obvious errors. The ‘Challenge’ stage involves a more detailed dialogue with the VOA on contentious points, which then makes a judgment. The final stage allows an appeal against this to the Valuation Tribunal.
The British Beer & Pub Association expressed support for the proposed new structures but expressed concerns about the timescales involved in the ‘check and challenge’ stages. It said it was imperative that the VOA made an appropriate level of information available to publicans on their valuation or it risked undermining the system
The body said it supported a refundable fee to reduce spurious claims – but insisted this must be capped at a reasonable level
Brigid, Simmonds, BBPA chief executive, said: “These proposals are a firm step in the right direction, as we have long called for changes to make it easier for publicans to appeal their valuations. It is one part of the jigsaw in what is much needed reform of the rates system, and we will continue to work for an effective revaluation in 2017, and encourage local councils to help pubs by cutting their rates burden, as well as calling for new ways of spreading the burden fairly among other businesses. We would also urge Government to reconsider the ending of Retail Relief in April 2016, which will add up to £1,500 to the rates bills of three-quarters of pubs, this April.”
Association of Licensed Multiple Retailers chief executive Kate Nicholls said: “We are pleased to see the Government addressing the issue of reform in this area, but we are also worried that the focus may be drifting away from once in a generation reform the Government has promised.
“Property costs for pubs and bars remain the second largest operational overhead and the ALMR’s annual Benchmarking Report shows them rising by 18% over the past decade. The average pub currently pays just under £15,000 with nightclubs paying over £26,000. Reforming the appeal system is a small step on the way to change, but we need to ensure the focus remains on larger scale, meaningful reform.
“We are also concerned that the new system, which seems to place the burden of proof on the occupier, will add complexity to an already convoluted a system. Evidence used to determine Fair Maintainable Trade is not disclosed in the first instance to the businesses in question, and the new proposals do not oblige the VOA to provide this at the check stage. There is a real danger that, unless transparency is provided earlier in the process, the Government may find itself dealing with numerous, time consuming appeals that make life easier for nobody.
“Any reform to the appeals system needs to give full disclosure of the rental valuation at the earliest opportunity. Only then will it help reduce administrative burdens for businesses.
“First steps on the road to reform show the Government is listening, but meaningful, root and branch reform must follow quickly.”
