The government department responsible for handling business rates appeals is struggling to cope with the growing backlog of cases it has to deal with. Senior sources within the commercial property market have commented that they can’t see how the Valuation Office Agency could possibly deal with the backlog of close to 300,000 appeals without more funding or outside help and speculation suggests that any third party assistance will come from private companies.
The agency is currently preparing new charges for 1.8million properties which will be made public this coming September before coming into force in April 2017. However, the number of appeals is believed to be at almost the same level it was 12 months ago, based on analysis which has been carried out by a national property advisory firm, and it is also believed that the agency is working at a rate of approximately 10,000 appeals a month.
There are also concerns from sources in the commercial market that many businesses are set to face these historic rate rises in 2017 because of the huge rise in property values in many areas and this is likely to result in another wave of appeals.
Currently the private sector firm Capita already have an assisting role in some local authorities when it comes to the collection of business rates and council tax but there is a belief that firms of this nature may begin to play a more direct role in handling the backlog of appeals.
Simple Business Rates System Needed
Both the owners of property firms and business rates campaign groups have persistently called for a much simpler system with more frequent rates valuations and a change to the current five-year cycle to a three-year or even annual cycle. Campaigners believe this would bring the number of appeals down by linking the current property values more accurately to business rates.
A spokesman for the Department of Communities and Local Government, which has responsibility for the Valuation Office, commented: "We provide significant funding to the Valuation Office Agency for its valuation duties, including responding to appeals. The VOA is independent and has to prioritise its resources appropriately, including delivering the major programme of preparing for Revaluation 2017."
Additional pressure has been added to the situation after the same national property advisory firm, which carried out the business rates appeal analysis, sent a warning letter to the government, highlighting the pressure facing the Valuation Office Agency and the appeals system.
A spokesperson from the firm said: "With revaluations only every five years, we have clearly created a culture of appeals. We are calling on government to seriously consider three-yearly revaluation as a way of producing a more accurate rateable value, thereby suppressing the need to appeal."
They also asserted the need for additional funding for the department and how there is currently an ‘unacceptable backlog’ of appeals.
Not everyone is keen on the idea of private company involvement to sort out the problem but the chances of receiving government funding is unknown at present and a solution is quickly needed.
Many businesses are set to face these historic rate rises in 2017 because of the huge rise in property values in many areas