Communities minister outlines new business rates appeals system

A simpler three stage system for business rate appeals will be introduced ahead of the 2020 transition to councils depending on these rates for the bulk of their income, communities secretary Greg Clark has said.

He said at present the vast majority of cases do not lead to a successful appeal and fewer than 2% proceeded to a tribunal hearing.

The new ‘check, challenge, appeal’ process would ensure that genuine disputes are settled more quickly and bring greater security to councils when planning their budgets, Mr Clark said.

“For too long we’ve had an appeals system where backlogged cases – often caused by unscrupulous agents eyeing up a fast buck – meant unnecessary costs and uncertainty for all involved,” he explained.

“That’s why we are going ahead with our plans to streamline the process and help resolve cases as quickly and fairly as possible. The vast majority of disputes will now be settled long before lengthy litigation.”

The change has been introduced to try to settle disputes before they can impede the new system under which from 2020 councils will retain all business rates income rather than receive government grant.

More than 955,000 appeals were submitted against rating valuations for the 2010 Rating List in England and the government said most were from agents, often operating on a ‘no win, no fee’ basis, putting in protective or speculative appeals with no supporting evidence. In some cases even the businesses involved were unaware this had been done on their behalf.

Under the three-stage process an initial check will ensure the relevant facts are correct, with any agreed errors quickly rectified.

At the challenge stage businesses can explain their grounds for questioning the rate and put forward an alternative valuation with supporting evidence. Ministers expect most cases to be resolved by this point.

The appeal stage enables unresolved cases to go to an independent valuation tribunal for which a £300 fee will be payable, refundable if the case succeeds. A penalty of up to £500 may also be imposed if false information is provided  “carelessly, recklessly or knowingly”.

Users of the new system will be able to track progress of their cases online.