Tax & admin · 29 August 2017

Seven-year business rates appeals backlog leaves thousands of rebates pending

Tax rebates could be delivered to almost 80,000 business owners
Tax rebates could be delivered to almost 80,000 business owners

A fifth of all business rates appeals made since 2010 remain unresolved, new data has revealed, with thousands of company owners still due a government tax rebate.

According to official figures released by the Valuation Office Agency (VOA), the body within HMRC responsible for handling business rates appeals from UK companies, 233,550 appeals against the nationwide revaluation in 2010 are yet to be settled.

The VOA claims the success rate of appeals is almost one in three – meaning 256,760 out of 1,132,020 business owners received a tax rebate from their business rates bills between 2010 and the latest revaluation in April 2017.

By the same rate, 77,850 tax rebates could still be delivered to UK business owners who have overpaid on rates since 2010.

Since the new business rates regime was introduced in April, 990 appeals out of 1,010 remain unresolved, while the government has set aside £1.3bn for tax rebates to business owners overpaying on bills.

In response to the data released by the VOA, business rates specialist CVS highlighted the cuts to the agency’s workforce as it battles against a government budget cut of 29 per cent.

Over 500 staff members have been lost in the last seven years, almost one in seven employees, and a further 1,000 are expected to be cut by 2020.

CVS also pointed out the government’s increased tax yield expected from the recent revaluation – from £28.8bn in 2016/17 to £33.7bn by 2021/22, a 17 per cent revenue hike.

Mark Rigby, chief executive of CVS, warned that underfunding of the VOA prevented founders from accessing a consistent appeals system with the confidence of expert case handling.

“It is foolhardy of the government to think that strategic statutory functions of providing fair and accurate property valuations can be maintained with business rates appeals being resolved quickly and efficiently, whilst slashing resources and haemorrhaging experience and expertise,” Rigby said in a statement.

“The overwhelming consensus is, and remains, that the VOA needs greater funding, otherwise it’s been totally disingenuous to increase the yield by £1.3bn this year to provide for losses on appeal through tax rebates.”

Meanwhile, the VOA has recently begun re-assessing tens of thousands of commercial properties due to a so-called “staircase tax”. Some 30,000 business owners are expected to receive a backdated increase to bills as their firm occupies multiple floors that can be accessed by private staircases or walkways.

“This latest twist in the business rates tale serves as yet another reminder of what a regressive system our entrepreneurs are faced with when it comes to this tax,” said Mike Cherry, national chairman of the Federation of Small Businesses (FSB).

Paying over the odds for your premises? Read our essential guide to the business rates appeals process

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.