Many small firms forced to pay rates – despite being able to prove they should be exempt
Proposed changes to the business rates system would see many small firms charged rates – even when they could prove that they should be exempt.
Under the reforms, appeals against next April’s revaluation assessments which fall “within the bounds of reasonable professional judgement” could be dismissed – giving an effective veto over challenges where the claimed valuation is deemed to be close enough to original assessments.
Business groups have already railed against the proposals – pointing out that firms of all sizes could face overpaying their bills even when they could prove they should be lower. But the impact on small businesses could be even greater, as many will face bills despite qualifying for business rates exemptions. Others would be denied reliefs that they are in fact perfectly entitled to.
Small Business Rates Relief (SBRR) is available for firms occupying a single property with a rateable value of up to £15,000. It provides total exemption for RVs up to £12,000 and a discount for those up to £15,000. As an example, a property that had an assessed rateable value of £15,100 (and therefore non-qualifying for SBRR) yet could prove it should be £13,600 would face a rates bill of £7,051.70, when it should in fact benefit from SBRR and owe less than half of that at £3,387.09. With the assessment at £15,100 within 10% of the true rateable value, the VOA might reject any reduction.
Jerry Schurder, head of business rates at Gerald Eve, said: “These wildly unfair proposals represent the Government’s intention to grant itself the equivalent of papal infallibility and legislate away its errors, making hard-pressed businesses pay for the VOA’s mistakes. The Government seemingly has no confidence in the VOA’s assessments, in which case it needs to reform the VOA or the system, not penalise businesses by outlawing appeals.
“The lack of definition of ‘reasonable professional judgement’ gives carte blanche for appeals to be dismissed, condemning firms to unfairly high bills without recourse. The fact that the changes would see companies overpay their rates even when able to demonstrate their bills should be lower is a damning indictment of the Government and symptomatic of its track record of ignoring businesses’ calls for a reduced burden.
“The Government is telling businesses to pay up and shut up, which is quite preposterous. Imagine the outcry if employees could show that they were paying too much income tax but had no means to reduce their payments. We call on the Government to remove this manifestly unjust proposal, and are lobbying with clients and business groups for this to be overturned.”