10th March 2010

Time running out for backdated business rates appeals, warns FPB

Small enterprises are being warned that they have less than a month left if they want to contest their business rates over the past five years. Any business owners who believe they have been charged too much for their rates since the last revaluation in 2005 have until March 31 to appeal.

The Forum of Private Business (FPB) believes around 160,000 small businesses have already won backdated reductions in their rates since April 1 2005, when the current rateable period began. However, many more may be eligible for a reduction without realising it.

There are two main grounds on which businesses can appeal against their rateable value. They can show that they are paying more than neighbouring properties – the Valuation Office Agency’s (VOA) website at www.voa.gov.uk allows business owners to find out what neighbouring premises pay and whether or not they have appealed against the amount.

Alternatively, they can prove that there has been a ‘material change’ in their circumstances since 2005. This means something in the business’s immediate surroundings has changed and had a detrimental effect on trade. Examples include streets being closed off due to roadworks, a high proportion of empty shops or a change in the size or use of the claimant’s premises itself.

Business owners can also take the opportunity to appeal against their forthcoming business rates, which will come into effect in April, after rateable values were controversially re-assessed just before the credit crunch sent rents and property values tumbling.

The FPB’s business rates adviser, Andrew Bacon of LeaseholdersUnited, explained the appeals process: “Many businesses will see their rates bills soar in the coming months and years but they do have a general right of appeal. Following the new rates revaluations they can make one main appeal for the period April 2010 to March 2015. However, until 31 March this year they can still appeal against their old valuation if they disagree with it.

“Appeals can be made free of charge, and making an appeal is fairly straightforward. Once made, there is a discussion period where the person making the appeal explains to the VOA what they think is wrong. If no agreement can be reached the appeal goes to tribunal but that only happens in about one in every few hundred cases.”

The burden of explaining the details of what is wrong with the valuation is on the person making the appeal. It is therefore important to understand clearly how your ratable value has been calculated and why it might be wrong before making an appeal.

“The 2010 ratable value is based on April 2008 rental values – just around the peak of the market. Should low rents agreed in 2009 now be taken into account in setting the correct ratable value?” asked Bacon. “The Valuation Office will probably say no, but it is not that clear cut.”

For more information, call the FPB on 0845 612 6266 or go to www.fpb.org