Business Rates and Rateable Value: How to Check, Challenge and Appeal What You Pay
Business rates are determined by your premise’s Rateable Value but sometimes the details behind the calculation are wrong, which means you could be eligible for a reduction and refund.
Business rates, which are based on your premises Rateable Value, are likely to be one of your highest annual fixed costs, which you no doubt pay without question – until now.
The calculations used to determine how much business rates you currently pay, or may have paid in the past, could be wrong. If so, you will be entitled to a reduction in your annual costs and potentially a refund on past payments and even past listings.
So, how can you check to make sure your Rateable Value is correct and what can you do if you think it’s not?
Before You Begin
Check, challenge and appeal
In England there is a business rates appeal process commonly referred to as check, challenge and appeal. The check and challenge stages of the process are handled by the Valuation Office Agency (VOA), with appeals going to an independent Valuation Tribunal. It’s important to note this process is for England only. Wales, Scotland and Northern Ireland have different processes.
If any details about your property or land, which are used to determine your Rateable Value, are incorrect, you or your appointed agent (or your Landlord) will need to inform the VOA. This is known as a ‘check’ and can be done through the VOA’s website.
Using the same approach, you can request a recalculation of your Rateable Value, which could change the amount you pay in business rates. This can be requested without any factual detail changes or evidence, but it is not recommended. Requesting a recalculation is known as a ‘challenge’ and can only be done after a completed ‘check’.
In a nutshell, a check is about agreeing the correct property information, whereas a challenge is about agreeing the correct valuation. If, after completing your check and challenge, you still do not agree with the outcome you can launch an appeal.
Is it really that simple?
Unfortunately, no. Even registering online and setting up an account may have you scratching your head – and that’s the easy bit.
Despite what the government website says, to be successful you will need a wealth of evidence to prove your valuation is wrong. Sometimes the smallest, seemingly insignificant detail about your property could help you get a reduction, but only experienced Chartered Surveyors would know this.
Additionally, accessing sufficient comparable market data, being able to interpret it and turn it into a case for a reduction is a huge challenge. The more data you have, the stronger your case could be, but equally the more challenging it is to translate into a meaningful argument. Again, a specialist Chartered Surveyor, with knowledge and experience of your local property market, will help you. So, whether you appoint Altus Group or someone else, we always recommend appointing a Chartered Surveyor if you want to get the best outcome for your business.
Appointing a Chartered Surveyor to act as your agent means all this stress and hassle is removed, and the time-consuming work is carried out by professionals who do it day-in-day-out. It also means if your case goes all the way to appeal you won’t have to pay for additional legal costs. Your Chartered Surveyor should cover this as part of their service and act as your expert witness. That said, by appointing a qualified Chartered Surveyor, the likelihood of your case going to appeal is rare because of the weight of evidence they will present at the challenge stage.
Appointing your agent
Choosing an agent to act on your behalf is something you need to take your time over. Unfortunately, there are unscrupulous and untrustworthy agents acting in the market today. These agents often leave their clients with significant bills, unsuccessful outcomes, and a poor client experience.
However, a qualified Chartered Surveyor will be a member of the Royal Institution of Chartered Surveyors (RICS), the Institute of Revenues, Rating and Valuation (IRRV) and the Rating Surveyors’ Association (RSA). As such, they must follow the mandatory code of practice, which offers assurance of quality of service and professionalism for their clients. Check to make sure your agent’s credentials are genuine and trustworthy.
Additionally, look for those that offer no-win-no-fee, where the amount you pay is a percentage of your overall saving. This will ensure you don’t end up paying fees that are higher than the amount you save.
For example, Altus Group is a global real-estate agent with over 2,250 employees in offices around the world. In the UK, we advise on property taxation, lease consultancy and property investments on behalf of occupiers and investors. We have the largest business rates team in Britain with 400 dedicated employees, including over 120 specialist Chartered Surveyors, across a network of regional offices. We represent over 55,000 clients, from SMEs to many of the world’s leading corporations, with over £5 billion of Rateable Value under instruction, and we handle more business rates appeals than any other commercial real-estate firm. Being larger than any other business rates company in the UK, we have access to the largest and most comprehensive market data than anyone else. This means we can compile richer insights and intelligence to use as evidence in support of your check, challenge and appeal process. As a result, we secure more positive outcomes, all under our ‘no-win-no-fee’ approach. By using Altus Group as your benchmark, you should be able to choose the right Chartered Surveyor as the agent for your organisation.
Once you have chosen a Chartered Surveyor, you will need to use the online service to formally appoint them. For this you will need your agent’s unique code, which can only be obtained from them. After logging in, you will be able to choose whether you want your Chartered Surveyor to act as your agent for a check, a challenge, or both. You will need to appoint them this way even if you have added them to your Government Gateway account.
After you have successfully appointed your agent, they will be able to view your property information and submit checks and challenges on your behalf. You’ll also receive messages from the VOA when your agent does this.
When your property details are incorrect
For your business rates bill to be correct, your Rateable Value needs to be correct, which means your property details held by the VOA must be accurate. Some of these details you may know to be wrong, but your Chartered Surveyor will be able to dig out plenty more.
Once you and your Chartered Surveyor have sufficient evidence that the factual details of your property are wrong, you can request a change by submitting a formal check. Your Chartered Surveyor will do this on your behalf.
If you or your Chartered Surveyor discover additional evidence after you have submitted your check, a new check will need to be submitted.
When your property details are correct
In many circumstances, the general details held by the VOA are correct but may still be returning a calculation that results in you paying too much for your business rates.
Identifying and proving that is where a Chartered Surveyor, with access to a large and comprehensive source of market data, and expertise and knowledge of your local market, can help you secure a reduction and rebate.
Areas your Chartered Surveyor will focus on include:
- factors affecting the land or property that’s not in your control (such as long-term disruptive roadworks)
- the Rateable Value of the property
- changes to the premises address
- changes to the premises main use (description)
- changes to the effective date (the date when the change occurred and when any new Rateable Value would be effective from)
If your Chartered Surveyor has identified issues with any of these factors, or others that have a bearing on your Rateable Value, they will still have to submit a check as the initial stage of the process.
What happens next?
It is important to note that requesting changes to your details could lead to a change in your Rateable Value, which could result in a reduction but also an increase (in some cases, it will remain the same). This is another reason why appointing an experienced Chartered Surveyor is critical before engaging with the check, challenge and appeal process.
After your Chartered Surveyor has submitted your check, the VOA will review it and come back with requests for additional information where required. These requests will be made to your agent. However, in most cases the VOA will have everything they need to conclude your check. This may include amending the Rating List, for which you will be provided with written notification of any changes.
If you and/or your agent do not agree with the outcome of your check, you can proceed with a formal challenge.
Overview of the challenge process
With most enquiries, the check stage of the process resolves any issues, as it is based on facts about your premises. However, this is not always the case.
Unfortunately, businesses that undertake the process on their own usually lack the expertise and market intelligence to challenge the outcome of their check. As a result, they are forced accept the verdict of the VOA and pay whatever their revised business rates bill is, even if they disagree with it.
However, if you have appointed a qualified and experienced Chartered Surveyor, with access to a large and comprehensive source of market data, you don’t have to accept the outcome of your check if sufficient evidence or error can be provided.
Working on a no-win-no-fee basis, if your Chartered Surveyor is happy to proceed with a formal challenge, you can be confident of victory. Your agent can challenge any valuation, related to the same property, within four months of the initial check decision, or within 16 months of your check submission if the challenge is about a change in the surrounding area. You may also make a challenge if the VOA has failed to decide on your check after 12 months.
Circumstances where a challenge can be launched include:
- your valuation was incorrect at the time the rating list was created
- a change to your property or surrounding area has occurred, which should be shown in the rateable value (e.g. long-running roadworks)
- the VOA has made a change to your valuation, which is wrong or has not been made
- the VOA has applied an incorrect date to a change
- the property should be split into more than one, or combined with others into a single entity
- your property should be removed from, or added to, the rating list
- a legal decision on another property has rendered the valuation incorrect
- your property details are still wrong or incomplete
Your agent will not be able to submit a challenge on the same grounds more than once, although some circumstances may allow for this.
However, it is possible to make a challenge in the future based on grounds you have previously used. To do so, the grounds must have a different effective date. For example, your local water company may be digging up the road outside your premises to install new pipes and this may be a long-term project. This will be grounds to challenge your rateable value. However, at a future date, an internet service provider may dig up the same road to lay new fibreoptic cables. Again, these works may take several months. In this case you can submit a new challenge for the roadworks because they have started on a different date.
How to submit a challenge
Your Chartered Surveyor will handle the preparation and submission of your challenge. However, before they do, they will review your valuation and compare it to similar properties in your local area and scheme, which are of similar age, size and character. Having access to an extensive and comprehensive source of market data is critical to this process, as it will more accurately determine if your property has been valued fairly or not.
When your challenge is submitted, a range of documents must accompany it. These include a supporting statement that clearly defines why you are making a challenge and your reasons for doing so, which must fall under one of the grounds listed above. Your challenge documents will also need to explain how your evidence supports your challenge, and why your proposed rateable value is correct.
Supporting documents may include:
- valuations of similar local properties
- outcomes of legal proceedings
- any other supporting documents (i.e. photographs of your property and its local environment)
What happens next?
After reviewing your evidence, the VOA may contact you and/or your agent to discuss your challenge further. If you and/or your Chartered Surveyor are contacted for additional information you will need to respond within 20 days or risk a decision being taken without this critical evidence.
If the VOA agree with your challenge, they’ll amend the Rating List and send you written notification. But, if they only agree in part, you will receive an agreement form to complete. The Rating List will only be amended after you return the completed form.
In most cases, your Chartered Surveyor will have submitted sufficient evidence to reach a full agreement. However, in rare cases you and your agent may still disagree with the outcome of the VOA. Under these circumstances, the VOA will provide the reasoning behind their decision and outline any amendments they intend to make to the rating list.
Moving to appeal
It is rare for cases to progress to appeal, and this only usually happens under certain circumstances. Appeals must be submitted to the Valuation Tribunal within four months of the challenge decision, who will be able to offer an independent and impartial review of your case.
The Valuation Tribunal will oversee appeals against the following:
- the entry in the Rating List (the Rateable Value or some other part of the entry).
- a completion notice issued by the billing authority (local council) for a property. This notice shows the date the council believes the property is or will be complete, or substantially complete and from when rates should be paid.
- a transitional certificate issued by the VOA because of transitional relief, a scheme that tries to reduce the effect of any large changes in Rateable Value between rating lists.
It is your agent’s responsibility to submit all relevant information to the Valuation Tribunal, including any evidence that you want them to consider. Equally, the Valuation Tribunal may request a copy of your challenge and any other relevant documents from the VOA.
The appeal stage of the process is one that is extremely difficult to win without a qualified Chartered Surveyor, who will act on your behalf throughout and serve as an expert witness for your case.
While it is possible to launch your own check, challenge and appeal process, it is clear that success is difficult without the appointment of a qualified and experienced Chartered Surveyor acting as your agent.
Many Chartered Surveyors do not offer a business rates service, so it is important to do your research before choosing one. As a rule of thumb, the minimum criteria you should consider includes real-estate agents who:
- offer a no-win-no-fee service.
- are members of the RICS, IRRV or RSA.
- are a trusted brand.
- have an extensive track record (referenceable clients).
- have access to vast and comprehensive market data.
- offer business rates as a core service.
Once you have appointed your Chartered Surveyor and are confident in their capabilities, you can sit back, relax and let them do their work. In most cases, where sufficient evidence of a valuation error exists, you should expect a positive outcome for your business without having to go through the entire check, challenge and appeal process.