Why the tsunami of appeals proves the business rates system just isn’t working

The latest business rates appeal figures announced by the government’s Valuation Office (VOA) show that the business rates system and CCA, the ‘new’ Check Challenge Appeal business rates appeals system, clearly isn’t working.

According to government statistics 845,670 checks (the first part of the appeal process) were registered over the six years of the 2017 Rating List (1 April 2017 to 31 March 2023) – a figure which illustrates the extent to which businesses have been unhappy with their business rates bills and have been prepared to negotiate the complex CCA system to challenge them.

Of those registered against the 2017 list, 132,690 or 16% were registered in the last quarter (1 Jan to 31 March 2023) which was nearly seven times as many checks registered in the previous quarter, when 19,660 were registered. This shows how businesses rushed to register their appeals as the 2017 Rating list came to an end at the end of March.

As a result,  97,610 checks against the 2017 list are still outstanding as of 31 March 2023, up from 10,610 the previous quarter. Resolving these appeals will need a deluge of time and resource spent by the VOA, resources they don’t really have.

Such high numbers also illustrate that the current system isn’t working and that CCA has not been the panacea the VOA claimed it would be.

Let’s remember, CCA was brought in to stem the number of appeals made and to process them quickly. Yet appeal figures are now averaging over 140,000 a year and are as high as ever. Businesses still remain bogged down trying to get them resolved.

According to government figures there were 1,085,000 appeals registered in the seven years of the 2010 list. CCA was brought in in April 2017 to stem this demand and make appeals easier, but the system was so cumbersome and complex that many businesses got frustrated and bogged down that initiallyy, they gave up going through the new appeal system.

Appeal figures fell in the early days but not because CCA was working, as the VOA claimed, but because many businesses could not face the trauma of trying to negotiate the system and appeal their business rates. As the latest figures show, with similar numbers of appeals against the 2017 list as that of 2010, the discontent with business rates bills had not gone away.

We also need to remember that the current 2017 figures would be even worse if many businesses had not been given the two-year business rates holidays, they received during the Covid period and the government had not ‘outlawed’ the millions of appeals registered as an MCC (material change of circumstance) due to the pandemic’s impact on business.

The VOA keeps trying to frustrate ratepayers in appealing their rating assessments, but even with the hurdles in place, businesses are continuing to challenge their assessments in vast numbers. The suggestion that CCA is working has been blown out of the water with these statistics. The burden of business rates is too high and the lack of transparency about how their bills are arrived at is the root cause of this shocking number of people appealing their assessments.

We still need a reduced multiplier to make business rates sustainable – certainly down from a plus 50% tax – and more transparency from the VOA to explain how it arrives at the assessments it makes. And we need a complete overhaul of CCA.

Only then will we see concrete evidence that the government really is serious about reforming the business rates system and,  as a consequence, cutting appeal numbers.

John Webber is head of business rates at Colliers