Businesses could face an extra £1.9 billion in business rates bills as a result of Government attempts to block appeals against valuations, according to the latest research from Gerald Eve.
Under a controversial clause contained within proposed new regulations, the Government is seeking the right to dismiss any appeals against incorrect valuations that are deemed to be within the bounds of ‘reasonable professional judgement’ – even if an overvaluation can be proved.
The allowable margin of error has not been revealed but experts suggest it could be as much as 15%. Business rates specialists at Gerald Eve have estimated this could lead to companies having to overpay by as much as £1.9 billion over the next five years.
Analysis of successful rates appeals since the last revaluation shows that 82,333 businesses achieved reductions below 15%, and had the proposed rule been in effect, they would have been denied refunds totalling £1.9bn.
Jerry Schurder, head of business rates at Gerald Eve, said: “This shows just how punitive and deeply unfair the Government’s proposals are. Forcing firms to cough up an extra £1.9 billion is outrageous, and is a clumsy attempt to legislate away mistakes that will cause businesses genuine harm.
“Individuals would never tolerate overpaying their income tax when it could be proved a mistake had been made, and it is unacceptable that the Government expects firms to ‘pay up and shut up’ in this manner.”