A draft list has just been published on 30th September 2016, based upon April 2015 rental values . We are now able to view the VOs draft assessments on line, although many may change before 1st April 2017. Unfortunately, the Government will not announce either the new Uniform Business Rate for 2017/18 or, critically, the transitional provisions that will apply between the 2010 list and the new 2017 list. It is thus very difficult, until that happens, to estimate 2017/18 rate liabilities with any great accuracy.
However every single Edward Charles rating client will be written to in October, explaining what is happening from 1st April 2017 and the likely implications. As soon as the UBR and transitional provisions are announced (unlikely before the Chancellor’s pre-Christmas budget ) we will be able to establish what that means in terms of likely Rates liabilities from April 2017.
The appeal process will be completely different for the new list and whilst, where the assessment looks to be high, to appeal the new assessment as soon as the list comes into force would be the first course of action, it may not be possible to do that with the 2017 list because new procedures are to be utilised which the Government insist are to streamline the appeal process, but in practice may well be designed to at worst stop ratepayers from appealing, and at best designed to reduce the number of appeals.
From 1st April 2017 there will be a three stage appeal process known as check, challenge and appeal. The first stage will be purely factual where the ratepayer has the opportunity to check the facts upon which the assessment is made i.e. areas ,age of building, specification etc. The VOA have up to 12 months to agree the facts. Once facts are agreed the ratepayer then has the opportunity to challenge the valuation and at that stage the ratepayer has to present the rental evidence in support of that challenge. There is no encumbrance on the VOA to prove their valuation or indeed show how they have arrived at that valuation: the onus is on the ratepayer to present the case. The VOA then has up to 12 months to either agree that the assessment is too high, or not. If they remain happy with the assessment they will issue a certificate stating the same and it is only then that the appeal procedure commences and the ratepayer would then effectively make an appeal to the Valuation Tribunal. This will neccessitate submitting a written statement of case for determination. At that point the ratepayer will have to pay a charge of £300 to the Tribunal, which is only refundable if the appeal is accepted and the assessment reduced by the Valuation Tribunal.
Over the last few weeks you may have read in the property press that the regulations state that in the Challenge phase the Valuation Officer only has to satisfy himself that the assessment is within the “normal “ valuation tolerances. The Courts have generally held that “normal“ valuation tolerances are accepted as 10%-15% for straightforward properties such as offices ,shops or warehouses, but for more specialist properties the “normal “ valuation tolerances could be as high as 20%. Many rating consultants are taking the view that this regulation will give the VO the opportunity not to reduce( or even consider ) an assessment in the challenge phase unless the assessment is overtly too high by more than the “ normal “ valuation tolerance which could in certain circumstances be extremely punitive to the ratepayer. A reduction of 10% on a £1m assessment is a considerable sum of money but the VO may take the view that it is within reasonable tolerances! In a subsequent appeal to the VT the Tribunal are equally only charged with ensuring that the assessment is with the “normal “ tolerances
Either way it is clear that the new process is not going to improve the speed with which the VOA deal with appeals/challenges and it is going to become increasingly difficult to achieve a reduction and a fair figure for the ratepayer. The VOA themselves do not know quite how the new process will work and in practice we will have to wait and see how things pan out.
In truth , until we get to 2017 and work with the new rules, it is difficult to say what will happen in practice. However what is important at the current time is to keep ratepayers informed and advised and that process is now starting, following the publication of the draft list.