The Government’s latest business rates consultation (Fundamental review) proposes reforms that will effectively lock property owners out of the appeals process for their tenanted properties meaning ratepayers could face triple business rates.

Strategic property consultancy Cluttons have looked at what the Fundamental Review proposals that have been put forward are and how this will affect property owners.

Proposed changes that could negatively impact ratepayers:

• Ratepayers will be under a duty to notify the valuation officer of any physical change or change of use to their property even if they do not intend to challenge their assessment.

• There will be an annual return for ratepayers to confirm any changes made or not.

• A ratepayer will only be provided with three months to challenge the assessment from the commencement of the rating revaluation.

• The landlord of a tenancy property will lose his right to challenge the assessment

• Implementing a non-refundable fee for supplying detailed relevant rental evidence used to arrive at the rateable value in addition to a fee for submitting a challenge which would be refundable in case of a decision reducing the rateable value

• Allowing the valuation officer two years and nine months to settle challenges compared with 18 months currently.

• Reviewing when a material change of circumstances will apply.

Under the current system, rateable values are set at a common date, known as the “Antecedent Valuation Date. This date is currently 2 years before the rating list comes into force. The consultation discusses shortening the gap; however, the Government believes that in the medium term such a change is not deliverable in England without significant and unpalatable new restrictions to appeal rights ease.

The current 2-year gap is a fundamental flaw in the that will affect property owners, with the having a significant lag between the valuation date and the start of a rating list, additionally a lot can change within the property industry in 2 years.

Another potential problem from this review is the three-month window from the commencement of a rating list to allow a ratepayer to challenge their assessments is unreasonable, if a challenge goes to the appeal stage this could take years to conclude.

The 2023 revaluation will be based upon rental values effective 1 April 2021 and could be the most difficult revaluation yet with the backdrop of Covid-19 and the dearth of rental evidence upon which to base valuations.

The review was put in place with the aim of making rate values more meaningful and reflective of market conditions with considered evidence, however the reforms proposed include narrowing the appeals window to three months from the start of the new rating list. This means that ratepayers pay to request supporting evidence and information for their appeals which effectively makes it impossible to put in a well-considered and evidenced appeal on time.

“The Fundamental Review for business rates may be somewhat of a Trojan Horse – a back doorway of restricting the rights of a ratepayer to challenge their assessment. If this does go ahead, the only way to prepare is to prepare – know how to mitigate against these likely changes coming down the line, get your information and research in place now, and be ready to challenge them as soon as the window opens using an expert who can navigate the process on your behalf.”  Ryan Jones, Partner of Business Rates at Cluttons