Government moves to shake up the rates system only “scrape the surface” of what’s needed to stop tens of thousands of businesses boarding up stores, experts warned today.
Parliament is due to hear the second reading today of the Non-Domestic Rating (Lists) Bill. It would implement the Chancellor’s Budget promise to bring forward the next revaluation for non-domestic rates in England and Wales by a year to 1 April 2021.
Ministers claim the more frequent revaluations will mean business rates bills are more up to date in reflecting property values, and the bill will also shift to a three-yearly cycle of revaluations.
However, John Webber, head of business rates at global property advisors Colliers International, said the system needed much more drastic reform and that the moves were being stifled by chronic lack of manpower at the Valuation Office Agency.
“While we welcome the announcement that more frequent revaluations will be enshrined in legislation, it seems pointless having more regular revaluation if you don’t resource it accordingly and provide ratepayers with an IT system that works,” said Webber.
Webber slammed the online rating appeals system introduced in 2017, which, he said, two years on, was still failing those trying to appeal their business rates.
According to a series of FOI requests about the system made by Colliers, 87% of users trying to get their business rates checked have been dissatisfied or very dissatisfied out of 2,928 respondents in the first 22-month period since CCA was introduced on 1 April 2017.
“Overcomplicated procedures, lack of guidance and a largely un-navigable new online portal discouraged many companies from starting the whole CCA process, despite many with good cases for challenging their bills,” said Webber.
“Moving to three-yearly revaluations from four or five yearly will only work if the VOA has the manpower and technology to cope with the extra work. So far it sadly doesn’t look likely and things are only going to get worse. If this is the only measure the government is going to introduce to ‘save the high street’ then this is worrying indeed.”
Colliers’ attack comes with new figures claiming that since 2010 more than 20,000 shops have disappeared from high streets.
Analysis by real estate adviser Altus Group shows that from 2010 to 2019, 20,143 shops in England and Wales, liable for business rates, have been either converted into homes, restaurants and cafés, or demolished.
During the same period, Altus Group said 14,314 new shops came on to the Local Rating Lists, meaning the overall number of shops has fallen by 5,829.
Robert Hayton, head of UK business rates at Altus, said: “We are witnessing a repurposing of surplus retail space.
“Over the coming months and years ahead, as retailers continue to reduce their store portfolios with the growth of online shopping, there will be an increase in the intensity of that repurposing.”
A number of Conservative leadership hopefuls have pledged to scrap business rates for high street SMEs.
Hayton said the intention was “commendable” but said tax measures were also needed for major retail and hospitality businesses who were reducing their estates and headcount, often citing high rates as a contributory factor.
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