Following the recent introduction of the Enterprise Act, a local expert is warning East Midlands businesses that are considering challenging their rates bills to be wary of the new “red tape” and potential pitfalls it brings with it.
Andrew Martin, who heads up Lambert Smith Hampton (LSH)’s business rates consultancy team in Nottingham, believes the new legislation has brought with it new processes that are designed to simplify the system but will, in reality, make it much harder for businesses to challenge their rates bills.
He said: “We recognise the need for an increasingly sound tax base for local authorities but there must be a balance between need and fairness. The Enterprise Act was intended to cut red tape and back business to create new jobs, but it will have precisely the opposite effect. In fact, the sceptics among us might say that these changes are designed to dissuade challenges”.
The new Enterprise Act now requires anyone challenging their rates bills to provide full disclosure of information and send all the relevant supportive evidence with their initial appeal.
Martin added: “All the ratepayers’ arguments and evidence will now need to be set out and detailed within strict time limits, with the Government’s Valuation Office Agency (VOA) acting as the sole arbitrator as to whether a business’s challenge is valid. This means that if the challenge is defective in any way or does not contain sufficient information the Valuation Office can reject it. And if that isn’t enough, there are now heavy penalties for anyone who provides information that is in any way inaccurate, regardless of whether they have done it by accident”.
The new Enterprise Act has also enabled the government to share ratepayers’ information between its various bodies and their subcontractors, to enable all parties to cross-check information. However, rate payers launching a challenge are not allowed to see this information, despite it having been used to decide their rate liability.
Martin was one of a number of LSH’s business rates experts that challenged the proposals, as part of the House of Commons consultation process, on the basis that they were restrictive, long-winded and punitive. However, the government dismissed the recommendations and the Enterprise Bill was enacted with minimal alterations.
He added: “Many businesses will receive significant fluctuations in their business rate liabilities from 1 April 2017, but it is possible to find out what these are in September. It is nine years and once recession since they were last reviewed, so I would advise rate payers to consult a qualified business rates consultant to help navigate them through the new process”.
The Enterprise Act 2016 provisions will apply to all appeals lodged from 1st April 2017, which coincides with the 2017 revaluation, at which point 1.8m properties across England and Wales will receive new rates bills based on rental values as at 1st April 2015.