Business rates relief fund ‘is failing to pay out’

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Hundreds of thousands of businesses in England that appealed against their rates bills during the pandemic have yet to receive any relief from a £1.5 billion fund created by the Treasury in March, property experts have said.

Between April 1 last year and September 30 this year 446,620 businesses logged requests to check their bills with the Valuation Office Agency, a significant increase on the 170,000 that the Treasury said in March had appealed since the start of the pandemic.

Most of the firms claimed that the Covid-19 restrictions had caused a material change of circumstances (MCC), which is normally a valid reason to request refunds.

However, in the March budget the Treasury said the impact of the pandemic on property values “can only be properly considered at general rates revaluations, and [we] will therefore be legislating to rule out Covid-19 related MCC appeals.”

Instead, the government said it would provide business rates relief to businesses in sectors that had “suffered most economically” as a result of the pandemic, rather than on the basis of the fall in the value of their property.

However, property experts at Colliers said the Treasury had still not legislated this change in the rules and so no businesses in England had received any monies from the relief fund. Business rates appeals are handled differently in Wales, Scotland and Northern Ireland.

John Webber, head of business rates at Colliers, described the situation as a “disgrace”.

“We have over 400,000 businesses who paid their full-rate bills during the pandemic, despite the disruption to their businesses, [and] are stuck in no man’s land, with no clear way forward,” he said.

“The government ripped up the rule book retrospectively and those hundreds of thousands of businesses who had gone to the trouble of registering through the tortuous appeals system in good faith have found the goal posts moved before their very eyes.”

A spokesman for the Valuation Office Agency said: “Clearance of outstanding challenge cases remains a priority for the agency. Most outstanding challenges are related to Covid-19 and are on hold pending legislation. Outside of this we are prioritising hardship cases and older non-Covid challenge cases.”

Based on figures from the Rating Surveyors’ Association, made up of surveyors who advise on business rates, the ban on appeals could save the government £3.5 billion.

In last week’s budget, Rishi Sunak froze business rates in England until April 2023. The rateable values of business premises, which are based on annual rents, will then be reassessed for the first time since 2017.

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