Colliers concerned as 11.4% of Challenges on 2023 list “struck out”- nearly as many as number resolved
Latest figures announced today reveal that the business rates appeal system: Check Challenge Appeal (CCA) appears skewed against the ratepayer: with many businesses now seeing their Challenges struck out, often on a technicality, according to business rates experts at Colliers. This does not bode well for leisure and hospitality businesses appealing against their business rates.
According to government statistics, in the first twelve months of the new 2023 list (1st April 2023 to 31st March 2024), 63,100 Checks (the first part of the appeal process) were registered of which almost 17% remain outstanding. However, only 7810 have progressed to the Challenge (second) stage of the process, and of these Challenges, 5,930 (a massive 76%) are still outstanding. Only 990 (12.6%) of Challenges have been resolved but nearly as many, 890 (11.4%) of Challenges have been labelled as “incomplete” by the VOA and therefore struck out/ declared void.
Given the difficulty for businesses in registering a Check in CCA in the first place- the amount of detailed information businesses now need to provide means that most have to use professional rating surveyors- Colliers says this level of rejection, often on a technicality, is unacceptable and shows how arduous this system is becoming for ratepayers.
Latest CCA stats for the 2017 list, also reported today, are also concerning. The figures reveal as many as 22,900 Challenges against the 2017 list are still outstanding. This means that more than seven years after the start of the 2017 rating list,12 % of the appeals submitted have still not been resolved. And another 22,280 challenges, (11.8%), so nearly as many, have also been marked “incomplete” or struck out. Comparing the 2017 stats from May 2023 with today’s, further reveals that there are 3,890 new 2017 ” incomplete” cases, where in most cases the ratepayer will have no further recourse to appeal.
“The VOA’s lack of progress in resolving these high appeal numbers together with the numbers it has struck out, should certainly raise eyebrows.” says Webber.
Under the current system the VOA can strike a Challenge out as “incomplete” without giving any explanation as to why or entering a discussion with the ratepayer or their adviser. Colliers labels these as “technical knockouts”. The ratepayer is merely told if he/she does not like the decision to pay up and, “Go to Tribunal.” By contrast a rate payer or their adviser on receiving the news that the Challenge is “incomplete” can, in many cases, only be given 24 hours to dispute this. “It’s certainly not a fair two-way system” says John Webber, Head of Business Rates at Colliers.
Webber continued, “Given the worrying number of challenges outstanding from the 2023 list, it seems that the VOA is under pressure to reduce the numbers. Looking at the increasing number that are now labelled “incomplete” and thus void, even though most of these have been submitted with professional help, this appears to be one way they are doing this. It is astonishing the numbers struck out on technical grounds almost equals the total number resolved. The VOA’s refusal to explain or to negotiate their decisions is also extremely unhelpful.”
Webber cites the example of the advertising hoardings industry who have recently put in a Challenge to their business rates. Rather than discussing the values at pre-group discussion stage, the VOA has refused to communicate or negotiate and announced “No change” with the result the appeals must go straight to the costly and timely Tribunal stage to be heard. “Surely not what CCA was set up for?” says Webber.
Webber continued, “The figures reveal that the VOA is seriously under pressure. In addition to this outstanding backlog of appeals from the 2023 and 2017 lists, the VOA has had to start work on the next 2026 revaluation, with a new list valuation date of April 1st, 2024. We believe the VOA is severely under resourced to deal with the new list.”
“Against this background it is perhaps not surprising that there has been pressure to reduce the Challenges from the lists. But this is to the detriment of the rate payer. It is still shocking how public servants seem more concerned about massaging the figures and using the process to knock out challenges, than in getting to the right answer. The striking out of legitimate challenges purely to keep numbers down reveals how unhealthy the current system has become.”
None of this bodes well for businesses trying to appeal their business rates.”
However, even with all the hurdles in place, businesses are continuing to challenge their assessments. The burden of business rates is too high and the lack of transparency about how their bills are arrived at remains the root cause of this shocking number of people trying to appeal their rate bills.”