The CCA business rates appeals system is “clearly not up to the job”

The CCA business rates appeals system is “clearly not up to the job”

Insights have been provided by Colliers International

Colliers International has responded to figures released by the government on Friday 28 February 2019, highlighting that the Check Challenge Appeal (CCA) system is “clearly not up to the job.”

But what is it?

The CCA system came into force on April 1 2017, and this was in the face of immediately voiced concerns from the business rates professionals. They stated that it had not been properly thought through.

“Over complicated procedures, lack of guidance, and a largely unnavigable new online portal are still discouraging those with good cases from challenging their bills.”

Ratepayers are responsible for checking the information held on their qualifying property by the Valuation Office Agency (VOA).

If the individual has multiple properties on their portfolio, they must each be claimed separately, as well at the ratepayer providing supporting documentation that proves their identity.

In short, the process is “difficult and cumbersome”.

Background

When CCA was introduced in April 2017, it proved to be one of the largest changes to business rates in a generation, Colliers International has argued.

“It really is a system built around the mantra: ‘The computer says no.’ The ability to engage with actual real people would help enormously, but we doubt that is the aim of the government. The ‘we’ve got your money and we’re keeping it’ mentality seems to prevail.”

It included a significant rate increase across London and the south east, alongside a downside transitional scheme for the rest of the UK, thus it offered “little respite” to rate payers in depressed areas.

It undeniably caused chaos and economic difficulties for many businesses, particularly the retailers. Considering the difficulties bricks and mortar retailers are currently experiencing, this extension of pressure is certainly not helping.

The struggle for businesses

Colliers International has claimed that UK businesses are still struggling with the CCA business rates appeals system two years down the line.

“160,000 are potentially still sitting in the system, not able to get through to the check stage.”

“Over complicated procedures, lack of guidance, and a largely unnavigable new online portal are still discouraging those with good cases from challenging their bills,” said John Webber, head of business rates at Colliers International.

On Friday 28 February 2019, the government released figures for the 21 months starting 1 April 2017 and ending 31 December 2018.

As of last month, just 65,380 businesses had begun to dispute the VOA’s business rates assessments. This reflects less than 4% of the 1.88 million properties assessed for business rates in the UK. The appeals in the same period after the 2010 list was five times this amount at 330,000.

Colliers International further explained: “The VOA’s figures also show that only 220,000 properties have been approved by the VOA to begin the check system for CCA proceedings to begin. This means 160,000 are potentially still sitting in the system, not able to get through to the check stage.”

The pattern for challenges is not much better

Just one third of challenges have been resolved, Colliers International has revealed.

“At the very least, businesses now need to employ agents to help them get through the system, whereas before, many could appeal directly themselves.”

5,000 challenges cleared the averages out at 400 a month; with 800 a month being submitted, that is leaving 50% a month uncleared. As time continues, and the number of waiting clearances grows, the situation will only get worse.

Webber added: “At the very least, businesses now need to employ agents to help them get through the system, whereas before, many could appeal directly themselves.”

Industry insights

“We understand the VOA is now engaging about the 2021 list and case workers are being re-assigned to deal with the 2021 revaluation in the naïve belief that 2017 will go away.”

According to Webber: “We have also heard that, because the VOA does not have the manpower to turn around the checks in the system quickly enough, it is ‘parking’ some of the earlier submissions and concentrating on new ones coming in, so it appears to be more successful than it actually is. Some of these ‘parked’ checks need to be re-submitted, which is distorting the figures. People are calling 2017 ‘The Lost List’, because so few appeals are getting through.

“We understand the VOA is now engaging about the 2021 list, and case workers are being reassigned to deal with the 2021 revaluation in the naïve belief that 2017 will go away.”

“The lack of planning, insignificant time to trial the system before it went live, and apparent lack of desire by the government to engage with agents and their software providers has resulted in an appeal system unfit for purpose.”

He continued: “We are also worried that some companies may miss the deadline for the 2017 list, as this deadline date is now being disputed. We therefore suggest that, if businesses have any concerns about their rate bills, they get their disputes in now.

“It really is a system built around the mantra: ‘The computer says no.’ The ability to engage with actual real people would help enormously, but we doubt that is the aim of the government. The ‘we’ve got your money and we’re keeping it’ mentality seems to prevail.”

Webber concluded: “The lack of planning, insignificant time to trial the system before it went live, and apparent lack of desire by the government to engage with agents and their software providers has resulted in an appeal system unfit for purpose.

“However, the VOA tries to dress up the figures. With the 2017 rating revaluation producing some of the largest increases in liability in a generation, and 2018-19 and 2019-20 building up further rises, it appears this government has proved again that it neither understand the pressures facing businesses or has a willingness to act on calls to change.”

 

For more information on the CCA business rates appeal system, go to GOV.UK.

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