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This Constituency Casework page sets out some basic information that business ratepayers may find useful if they want to appeal against their business rates bill.
A business rate bill includes the rateable value of the property. This is set by the Valuation Office Agency (VOA). It is not the amount that the ratepayer will pay.
Any property’s rateable value can be found by entering its postcode into the VOA’s database. This will also show details of how the rateable value has been calculated, and the rateable values of similar properties.
Business rates bills also include the standard amount payable in business rates, together with details of any reliefs and discounts that apply. Where a property attracts 100% relief, the bill will be for zero. For instance, 100% small business rate relief applies to many properties with a rateable value of £12,000 or under.
Business rates are normally paid in monthly instalments, like council tax.
Valuing non-domestic property is complex. A huge range of types of property attract business rates, from sports stadia to power cables, to advertising hoardings and bus stations. The VOA’s Rating Manual shows the guidance that valuers use to assign rateable values to the different types of property.
Valuers are also guided by case law. This means it is not possible to state definitively that a valuation is wrong: this depends on the facts of the case. For instance, if similar properties nearby attract lower business rates bills than that of a constituent, this does not necessarily mean they will be able to appeal successfully.
Some properties may be part of a “valuation scheme”. This is a way of grouping similar properties in similar areas to ensure that their rateable values are consistent. The VOA’s database should show when a valuation scheme is being used to value a property.
Appealing – Check, Challenge, Appeal
To appeal against the rateable value assigned to a property, in England there is a three-stage process known as Check, Challenge, Appeal.
At the Check stage, the ratepayer must check the accuracy (or otherwise) of the facts on which the VOA has based its valuation. If these are in dispute, the ratepayer can submit a ‘challenge’ to the VOA. This must include the legal basis of the challenge, and a proposed alternative rateable value, with reasons.
If the ratepayer is unhappy with the VOA’s response to the ‘challenge’ stage, they may appeal to the Valuation Tribunal for England. The Valuation Tribunal is part of the courts system and will therefore take case law into account when making its decision. A ratepayer does not need a lawyer to submit a challenge to the VOA or appeal to the Valuation Tribunal, although they may choose to hire a rating valuation expert. Since 2017 there has been a fee of £150 (small businesses) or £300 (large businesses) to take a case to the Valuation Tribunal.
The existing business rates bill must be paid whilst any appeal is under way. If the bill is reduced as a result of the appeal, the VOA or the Valuation Tribunal may then give the ratepayer a refund.
A ratepayer who wishes to appeal against the business rates bill itself, as opposed to the rateable value, should contact the (district or unitary) council. This would be the correct route where, for instance, a ratepayer was not awarded a discount that they believed they were entitled to. If discussions with the council are unsuccessful, the ratepayer can then go to the Valuation Tribunal for England.
If a ratepayer’s appeal is successful, and the VOA or the Valuation Tribunal determines that their rates should be lower, they may receive a refund of overpaid business rates.
A refund can be backdated if the Tribunal decides that the circumstances that justify the change in valuation arose at a particular date in the past. This is known as the ‘effective date’.
For instance, it would be possible for the Tribunal to decide that the rateable value assigned to a property at a revaluation was not correct, and to direct the VOA to reduce the rateable value. If this happened, the change could be backdated to the date of the revaluation, and the ratepayer would be entitled to a refund of all overpaid rates since then. However, whether this happens depends on the facts of the case. Even if the ratepayer wins, this is no guarantee of a backdated refund.
All rateable values are revalued periodically. The next revaluations in all parts of the UK will come into effect on 1 April 2023.
As the last revaluation for England, Scotland and Wales came into effect on 1 April 2017, the rateable values of some properties can change substantially, if economic conditions have changed. This means that some properties may attract considerably higher business rates following the revaluation, and some businesses may struggle to pay them.
In England, transitional relief schemes have historically placed limits on the amount by which business rates bills can go up after a revaluation. The Government is required by law to operate a transitional relief scheme in England. This may lessen the burden of higher business rates for some businesses in the short term.
The Government also plans to revalue properties every three years in future (2023, 2026 and so on). If this happens, there should be fewer very large changes in business rates bills in the future.