Government Extinguishes COVID-19-Impact Business Rates Appeal Hopes

As Tax Day Approaches UK Businesses in Limbo as VOA Declines to Negotiate over Largest Number of Material Change of Circumstances Business Rates Appeals in History

Hundreds of thousands of businesses are set for further pain, experts are warning, as the Government’s Valuation Office Agency (VOA) has refused to come back to the negotiating table to discuss COVID-19 Material Change of Circumstances (MCCs), which they say represents the “largest number of MCC appeals caused by a single event in rating history”.

The RSA COVID-19 Steering Group (RSASG), the body set up by the Rating Surveyors’ Association (RSA) to engage with the VOA on COVID-19 implications and representing 85% of the ratepayers with outstanding COVID-19 MCC appeals, said it is “desperately disappointed” that the VOA will still not engage with it nor provide a compelling reason why it feels unable to do so, three months after talks were abruptly terminated.

The RSA made up of business rates experts is now galvanising its members and calling on them and other professional and industry bodies to bring pressure on the Chancellor to support the VOA in coming back to the negotiating table, so that a constructive solution can be found or to use Tax Day this week to make unilateral alterations to the lists for those most affected businesses at a sector-wide level.

Many businesses that occupy office space have been severely impacted by COVID 19 and the various lockdowns which has led to a significant drop in productivity and profitability.

RSA stated that "despite enforcing restrictions of use and encouraging working from home, the government is expecting all office-based businesses to meet their rates bills in full".

It said that unlike businesses in other sectors such as those in retail and leisure/hospitality, office-based businesses received no rates holiday in 2020-21, and only the smallest businesses were able to benefit from the initial government grant schemes. Equally it points out that no reprieve was offered by the Chancellor in his Budget on March 3.

The RSA has estimated that £5billion is at stake and says this is money that would "safeguard jobs in many sectors that have fallen through the cracks, in terms of not receiving sufficient government support".

The disruption to business is shown by the fact that the number of businesses appealing their business rates on the grounds of Material Change of Circumstance (MCC), is at its highest rate in rating history.

Since the New Year appeals have risen further and the RSA estimates the number of outstanding checks is now around 400,000 and expected to increase further.

The RSA and VOA were understood to have been working constructively together towards that common goal last Autumn with sector specific discussions underway, with those concerning airports, advertising rights and car parks nearing conclusion and a plan to provide a significant reduction for businesses in the office sector tabled.

However, the VOA broke off all negotiations with the RSA in December and has since refused all approaches to come back to the negotiating table or explain why it is refusing to engage.

The RSA also pointed out that it is likely the VOA will need to handle these Challenges at the same time as it progresses the next Revaluation exercise - so delaying agreeing what it terms a sensible solution will only put further pressure on the system down the line, plus lead to further costs and expenses for all parties.