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Business groups accuse government of rates cover-up

Letter seen by Property Week claims decision to postpone revaluation taken to avoid new appeals

Business groups from the retail and property sectors have accused the government of concealing the truth behind its decision to delay a crucial revaluation of business rates until 2017.

In a statement seen by Property Week, prepared to coincide with the second reading of the Growth and Infrastructure Bill, influential groups have suggested the government postponed the review of business rates by two years to avoid a flood of new appeals, rather than to prevent spikes in some businesses rating bills.

The move will put further pressure on MPs to make public the evidence purportedly carried out by the Valuation Office Agency (VOA) that suggests the 2015 revaluation — the redistribution of rates — would have hiked rates bills for 800,000 premises, while 300,000 would get a discount.

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The statement was signed by six groups, among them the British Property Federation, shopping centre organisation BCSC, and the British Independent Retailers Association.

It said: “Anecdotal evidence and the work of rating specialists outside the VOA cause us to be sceptical about the minister’s statements. We believe that relatively few areas … will have seen rents perform better than the national average since 2008, with most outside those areas standing to benefit from a revaluation and lose from its delay.

“We suspect the decision may have been motivated by concerns about the difficulty of carrying out a revaluation in the highly illiquid current market, in which the paucity of valuation information seems certain to prompt even higher levels of appeal than usual.”

Figures that emerged in parliament last week showed 76,410 appeals from 2005 remained unresolved in March 2012 and as many as 241,700 remained unresolved from 2010 by the same date.

The postponement of the five-yearly revaluation emerged in the Growth and Infrastructure Bill two weeks ago. The decision was met with derision from the business community, which labelled it “the retail equivalent of the poll tax”.

Businesses in areas where rents have fallen by more than the national average, Britain’s poorest communities, were set to receive a reduced rates bill in 2015, while those where rents had risen or fallen by less than the national average would be required to pay more.

Brandon Lewis, minister for local government, was forced to defend the government’s decision. In the Sunday Telegraph, he wrote: “Some people assume falling business rents somehow equal falling business rates: everyone’s a winner. That might happen in a perfect world, but not in the complex citadel of local government finance.”

Mark Williams, partner at asset manager Hark and chairman of the new Distressed Town Centre Taskforce, said: “We’ve seen no hard evidence and they’ve made no data available to suggest the government’s claims can possibly be correct.”

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