Business rate appeal delay is ‘costing firms millions’

Delays in processing business rate appeals are costing Sheffield businesses over £2.7 million per year according to new research from CVS, the business rates specialist.

CVS has uncovered a backlog of over 328,000 business rate appeals at the Valuation Office Agency (VOA), the agency in charge of calculating business rates and council tax in England and Wales.

A third of these date back to 2005 and 5,476 are appeals from East Midlands businesses of which 1,212 relate to Sheffield.

The result is that tens of thousands of business ratepayers in England and Wales have paid too much and, to compound the problem, they are unable to retrieve the money owed to them as a result of the inefficient appeals process.

CVS says that at the VOA’s current rate of performance, it will take a further 2.4 years to clear the backlog of 2010 appeals.

Thousands of appeals against the 2005 ratings list are also still outstanding and the VOA is also holding over appeals from 2005 to consider alongside those from 2010, creating an additional and extended backlog.

This inability to resolve appeals in a timely fashion and return money to businesses that have over-paid is fast becoming a business critical issue according to CVS, and is preventing SME businesses from contributing to a private sector recovery.

Don Baker, National Head of Rating at CVS, said: “The VOA’s speed of processing business rate appeals is unacceptably slow. At the moment, businesses need all the revenue they can get and the VOA’s inefficiency is penalising companies unfairly and preventing those companies from recovering money that is rightfully theirs.

“This is weakening the financial health of a large number of SMEs across the country and damaging businesses’ ability to invest and grow. Urgent action is needed to clear the backlog and to give SMEs a fighting chance of leading the recovery.”

New procedures introduced in January are to blame for the appeals backlog. CVS says it would like to see greater clarity from the VOA on these new procedures, a reduction of bureaucracy in the system and improved compliance with the appeal procedures across the country. Together, these changes would help to speed up the appeals process.

This inconsistency has resulted in appeals being struck out unnecessarily, even in cases where the settlement of the appeal has been concluded but not formalised by the two parties.

Mr Baker added: “It is just not acceptable that businesses have to wait years for their business rate appeal to be settled.

“Every day the appeals backlog continues to grow and the delays are harming businesses’ ability to invest and contribute to local economic growth.

“The Government is championing a growth agenda and looking to private sector firms – and that means SMEs in particular – to stimulate investment. That policy and the VOA’s current performance are completely inconsistent.”