PwC comments on the first detail of the business rates revaluation
30 September 2016
The Valuation Office Agency releases draft Rateable Values for 1.94 million commercial properties today. This is the first revaluation for seven years and will include changes to the rating system, including a new appeals system.
Phil Vernon, Head of Rating at PwC said:
“Businesses now have the starting point for calculating their tax from April 2017. The overall increase in English Rateable Values is 9% nationally, largely due to an increase in London values which are set to rise by 22%. However, without information on reliefs and exemptions the potential impact for businesses remains unknown.
“Under Government consultations business rates on some London properties could increase by as much as 45% in April. Whilst there is some reassuring stability for companies outside of London, larger property portfolios may see an overall increase. For example, large utility companies face an increase of up to 40% on their infrastructure assets.
"Significantly the draft Rateable Value cannot be appealed until 1 April 2017, when a new appeals system takes effect.
“Under the current appeals system, the Valuation Officer’s initial assessment can be challenged as a matter of course, starting a programme of informal negotiation and ending in an appeal to a Tribunal. From April, ratepayers will be expected to complete two preliminary stages (check and challenge) before a full appeal can be progressed. Both stages will require full valuation detail being submitted by the ratepayer with penalties for inaccurate or misleading information. Companies will also be required to hold digital accounts in order to progress through these preliminary stages.
“The new system will have time limits built in to resolve appeals but it’s likely that these limits could prevent any appeal being settled for at least 18 months. In many case it may take several years for appeals to be formally settled.
“Somewhat controversially, the proposals suggest that appeals will only be allowed if the Ratepayer, or their Agent can prove that the Valuation Officer's valuation is outside the bounds of reasonable professional judgement. It will be open to interpretation by the Valuation Office Agency and ultimately the Tribunal Service as to what that means in practice.”
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