Market Insight

Mitigating against the burden of business rates

June 1, 2018

As business rates continue to be a source of concern for businesses across the country, Vail Williams’ senior surveyor, Adam Barnfield, gives his opinion on the current system and how the team of business rates experts at Vail Williams is helping clients navigate the complex process.

The business rates system will always be a bit of a political hot potato. The Government continues to have business rates on its radar and regularly throws curve balls at us – the most recent one being a shortening of the Revaluation term, from five years, which would have seen a revaluation in 2022, to four and then three-yearly thereafter.

Vail Williams continues to mitigate against the burden of business rates for our many and varied clients, from retail units, offices and industrial units to mills, football grounds and caravan parks, the length and breadth of the United Kingdom. In the Birmingham region alone, we have approaching 600 clients under instruction, which roughly translates into 1,200 properties and nearly £105m in rateable value. As a company we have approaching £240m in rateable value under instruction in England. This does not include the many and varied clients we also represent in Wales and Scotland as well.

The stumbling block we now regularly face is the new ‘Check, Challenge and Appeal’ or CCA system. The system is clunky, long-winded and frustrating. As your representatives, we used to be able to do everything on your behalf. From submitting the appeal to the VOA, right through to discussing the rebated funds with the council. Although this is still the case, we now need you to register us on the Government Gateway and we seem to be requesting signed letters of authority, for every department we speak to, from our clients daily. It’s no surprise that appeal numbers are down roughly 97% when comparing this stage of the 2017 Rating List with the 2010 Rating List.

The new CCA system was introduced, in my opinion, to stop spurious appeals clogging the system. According to recent statistics published by Government, it was estimated in March 2017 that there were still 250,000 appeals outstanding against the 2010 Rating List, with nearly 800 appeals still outstanding against the 2005 Rating List. The new system for challenging assessments is onerous but my experienced colleagues have adapted and, with a touch of innovation, the team has identified and is exploiting opportunities to mitigate our client’s liabilities. The process may still take years to complete but with interim settlements, we are able to reduce liabilities accordingly.

Meanwhile, the death of the high street continues apace with the burden of business rates one of the likely causes. Many prominent figures, including the chief executives of Foyles, The Entertainer and Argos, have spoken out about business rates and the cost impact it has over web-based retailers. I’m sure some other well-known high street brands that have recently filed for CVA would all agree. Marks and Spencer is also looking at reducing their retail footprint accordingly. It is estimated that 7.1m sq ft of occupied retail space is due to be lost in 2018 alone.

The topic of business rates will continue to be contentious. If the hasty introduction of a new appeal system wasn’t enough of a challenge, we now have the change in the rates multiplier from RPI to CPI, which is fair but, we must also contend with the Localism Act – which grants new powers on business rates retention to Local Authorities AND the more frequent revaluations from 2021.

If you have any questions on business rates, have any significant empty space or are suffering from the effects of works, road or building, for a prolonged period of time – please get in touch. We will always work to reduce the burden of this tax.