GL Hearn Business Rates Andrew Hetherton Director, GL Hearn – Head of Business Rates Past President of the Rating Surveyors’ Association IRRV Council Member – Chairman of the IRRV Valuers’ Association Accessible Retail, Deputy Chairman and Director glhearn.com glhearn.com
Agenda • What is wrong with the Business Rates System • Legislation as proposed • Check, Challenge & Appeal Implementation • Changes to the Tribunal’s approach • Changes in Case Law affecting parties
* April 2017 Inflation / Retail Sales • RPI 3.5% * up from 3.1% CPI 2.7% * up from 2.3% • Retail Sales rebound up 2.3% from March 2017 • Online shoppers spend more on line than any other country – £4,611 per household using payment on line in 2015 higher than Norway, the US and Australia – £154bn spent on the internet using cards in 2016 up by a quarter in two years – Raises the issue of how taxing companites should be taxed ?
Business Rates in the News
The Times – Monday 10 th May 2017
Legislation
Enterprise Act • Appeals Reform ‒ Too many appeals, little supporting evidence ‒ Based on Checking & Challenging your Rateable Value Consultation paper • Proposals ‒ A new Check stage, between 4 and 12 months to complete; ‒ Penalties for provision of false information; and appeals against those penalties ‒ Challenge will require additional information • Expanded grounds for the challenge • Valuation and supporting evidence • Case Law and other argument to be provided in support of the challenge ‒ Could take up to 18 months to complete ‒ Decision Notice issued by the Valuation Officer ‒ Appeal separate process after the Decision Notice – possibly 4 to 6 months ‒ Payment fees may be required 9
Stage one “ Check ” • “Interested Person” wishing to make a proposal must confirm “information” using online system • Or put forward revised information • With penalties for incorrect information provided “carelessly, recklessly or knowingly” • Any information from a professional representative will be shared with the ratepayer • “Information” not defined but must “reasonably relate” to the grounds on which a proposal may be made
End of “ Check ” • At this stage one of two things happens − The Valuation Officer notifies the ratepayer that the check has been completed and of any changes made to the facts on which the Rateable Value is based and any revision to be made to the rating list; or; − The time limit is reached – this is 12 months after the return of information to the VO • Only once the “Check” stage is complete in one of these ways will it be possible to make a proposal to alter the Rating List
Stage 2 “ Challenge ” • A proposal must be made within 4 months of the completion of the “Check” stage • A proposal must include a statement of: − Grounds of the proposal, including “particulars of the grounds” − Evidence to support the grounds − How the evidence supports the grounds − And details of the proposed alteration of the list − In effect a statement of case or rather more • Only when this is done will the VO respond
Stage 2 – “ Challenge ” • The regulations set out a procedure for dealing with “incomplete proposals” which are refused • In such cases the Valuation Officer must state what information is considered to be missing • With an opportunity to re-submit the proposal • Within 4 months of completing the check • But in calculating the 4 months the time between the proposal and the notice of refusal does not count • The current invalidity process no longer applies
Conclusion of “ Challenge ” Stage • The Valuation Officer accepts the alteration proposed by the ratepayer and alters the list; or; • The parties agree a different alteration; or; • The ratepayer withdraws the proposal; or; • The Valuation Officer issues a Decision Notice, setting out his considered decision with reasons; or; • The time limit is reached – this is 18 months from the date on which the proposal was made • Only once a Decision Notice is issued or the time limit is reached will it be possible to move to the next stage
Stage 3 – “ Appeal ” • Only once “Challenge” stage is completed either by a Decision Notice from the Valuation Officer or if no Decision Notice is issued within the time limit • Any appeal must be made within 4 months of the end of the “Challenge” stage • It will involve the ratepayer submitting an appeal to the Valuation Tribunal for England against either: − The Valuation Officer’s Decision Notice, or, − The failure to issue a Decision Notice • An appeal fee of £300, or £150 for a “small proposer”, with no fee if no Decision Notice issued subject to regulation
Stage 3 – “ Appeal ” • The appeal will have to include: − A copy of the Decision Notice (if issued) − A copy of the proposal and any evidence forming part of it − Any information provided by the VO in the “Check” • The Valuation Tribunal will • Or further evidence if it relates to the grounds of the proposal and was not known, and could not reasonably have been known, before the proposer had the right to appeal to the VTE
Statutory Instruments 155 • The Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2017 • Had to be in force from 1 st April 2017 – To coincide with the compilation of the 2017 Revaluation, – Any later would have resulted in ratepayers continuing to be able to make proposals under the existing system, – Creating as a result a two tier system – Possible unfairness for rate payers – Significant financial impact on the VOA
Statutory Instruments 156 • The Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) (Amendment) Regulations 2017 – Provides for the introduction of the new appeals system – Provides for appeal management powers – Regulations for the regulation of the admission of new evidence – Sets out matters that must NOT be taken into account by the Tribunal – Regulations relating a fee to be paid when lodging a non-domestic rating appeals which can potentially be refunded if successful
VTE and VTS Changes • Introduction of a Consolidated Practice Statement – Wholesale review of Practice Statements – Number of practices statements reduced from 26 – Common implementation date from 1-4-2017 tied to new regulations – focus on an effective and cost effective mean to justice – case clearance given the number of outstanding appeals circa 260,000 • Changes in approach – VT Pilot ran for 6 months in Kent & Leicestershire – A proactive approach to communication and case clearance – Arrangements in place to deal with multiple cases – Making best use of the resource time – Supports active dialouge and appropriate listing volumes
Reasonable Professional Judgement (RPJ) • One of the original proposal in the consultation on statutory implementation related RPJ • Proposals were outlined that the VT may only order an alteration to the rating list where it considers the list is inaccurate • “Inaccurate” being defined as “outside the bounds of reasonable professional judgement” • For the time being there would remain an unfettered right of appeal to the Upper Tribunal (Lands Chamber)
Reasonable Professional Judgement (RPJ) cont’d • Leading Trade Bodies and the Professional Bodies (IRRV), RSA and IRRV) expressed significant concerns • Representations were made to the Joint Committee on Statutory Instruments correspondence was sent by Berwin Leighton Paisner to the Clerk of the Committee. • The legislation has been held in abeyance due to the forthcoming General Election • A “Prayer of Regret” has been tabled • The matter will await the State Opening of Parliament as the revised working of “reasonable valuation” is is still of concern to many practitioners.
The End of the 2010 List • Disappointing – not what was promised !
Supporting Date Information • Issues surrounding the provision of information to include details surrounding: – Clearance of BA reports versus VO Reports – Withdrawal of supporting information: • Transitional Certificates, • Type of proposal, • Proposer / Date of Proposal “As part of the new website we have reviewed all the information we publish. We will include everything needed to fulfil our obligations whilst retaining the confidentiality of taxpayers’ information in our care and complying with information law requirements. We are working through publishing appeals information in the next few weeks. This will include the code of grounds, proposal case number and the settlement outcome for the appeal (including if it was outstanding).”
Check, Challenge Appeal and the Government Gateway
The 2017 List • Went live on 1 st April 2017 • Statutory List provided on time • Central List provided to “Client” on time • Figures suggest: – 860,000 unique visitors to the website ( up 36%) – Digital enquiries up from 11k to 36k – Telephone enquires down to 9,500 – Letters down from 12k to 460.
VOA Portal 2017
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