Tax & admin · 7 June 2016

FSB threatens legal action over business rates negotiation dispute

business rates negotiation
Almost 900,000 business owners have challenged the rates they pay since 2010

The Federation of Small Businesses (FSB) has thrown its weight behind a legal challenge against business rates negotiator CVS, one of the first times in the organisation’s history it has done so.

No-win, no-fee surveying firm CVS works with small company owners to help them appeal business rates and bring down the amount payable, charging an annual fee of 50 per cent of any savings negotiated.

Business rates are usually re-assessed every five years – with CVS fees covering the value of any discount achieved over the same period. Now, following a government announcement in 2013 that the start of the next rateable period would be deferred until 2017, the firm has invoiced customers for an additional two payments.

“Traditionally we don’t get involved in disputes,” FSB policy director Martin McTague told The Telegraph. “But as this issue has a very strong policy implication, we felt it was legitimate to get involved.” He also called for any business owners affected by the CVS demands to come forward to lodge complaints.

Almost 900,000 business owners have challenged the rates they pay since 2010. The Local Government Association (LGA) warned in May 2016 that the uncertainty that this creates for councils is costly for local authorities, especially as devolution of rates moves closer to becoming a reality.

“The sheer scale of appeals suggests that too many businesses are not happy with what they are being charged or are simply taking advantage of the fact that it is too easy to appeal, meaning they think they have nothing to lose,” warned LGA resources portfolio holder Claire Kober. “By 2020 local government could be liable for 100 per cent of refunds.”

A poll commissioned by the British Retail Consortium in 2014 found that 80 per cent of British MPs thought the system of charging local businesses bases on property value was not fit for purpose.

“The business rates system is still iniquitous, still broken, and still in need of fundamental reform,” said the then-director general of the Confederation of British Industry, John Longworth, who stepped down in March 2016 after speaking out in favour of a Brexit.

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Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics – as well as running a tutoring company.