Property Tax Bills Sent to Firms Confirming £845Million Rates Hike
The amount of money raked in from businesses by local authorities in England is set to rise by £845 million to £24.8 billion for 2018/19 according to figures released from the Ministry of Housing, Communities and Local Government.
In just 4 years, income from business rates has risen £3.2billion from £21.6billion in 2014/15 to the projected £24.8billion in 2018/19 up 15%.
It comes despite the Valuation Office Agency reporting a hefty drop in the number of firms questioning their business rates bill, fuelling concerns that a new appeals system makes it harder for companies to lodge challenges.
Appeals under the new Check, Challenge, Appeal system launched last April reached 12,840 in the first nine months, compared to 169,300 appeals during the first full-year of the previous regime, according to the Valuation Tribunal Service (VTS).
Nearly 27% of all appeals were from firms in London with 3,440 business premises instigating a check of their new tax calculations. Overall, under the revaluation, Rateable Values used to calculate tax bills rose 23.37% across London.
Firms in the South East, who’s Rateable Values rose 9.33%, lodged the next highest amount of checks with 1,930 firms appealing. However, in the North East, where Rateable Values fell by 0.4%, there we’re just 390 appeals, the lowest amount.
Altus Group, Britain’s largest ratings advisory firm, is handling almost 20% of the appeals made so far under the new system.
Robert Hayton, executive vice president of business rates at Altus Group, said: “We have nearly £5billion of rateable value currently under instruction with a view to bringing appeals where errors exist, and are making these regulations work for our clients.
“The early signs are promising, and incorrect tax assessments are being rectified.
“The acid test will be how responsive the system is to added volume over time and whether the work to reverse the Staircase Tax will have an adverse knock on effect.”
The business rates overhaul on April 1 last year saw 1.9 million properties in England revalued and left many businesses facing crippling hikes.Councils across England have also made a special provision within their forecasts and have set aside £1.2billion for tax rebates back to business during 2018/19 for successful business rates appeals according to MHCLG.
The Government came under heavy fire over the complexity of the new appeals system – with crossbench peer John Lytton telling the House of Commons last year that it involved “the most torturous” registration and had been designed to “prevent appeals”.
Chancellor Philip Hammond sought to appease concerns over the rates revaluation, announcing a £2.3 billion reprieve in the Budget by bringing forward plans to switch the inflation measure used to calculate annual increases.
He also revealed plans to reduce the period between revaluations to every three years and said he would extend a £1,000 discount on bills – for pubs with a rateable value of less than £100,000 – for another year until March 2019.
But he was condemned for not doing enough to support struggling firms, with many calling for a rates freeze and others demanding a full overhaul of the system.