'Reasonable' chances of litigation as rates face a high profile restructure
HOW WILL THIS AREA FARE? Duncan Young's aerial shot of Grimsby town centre.
By Grimsby Telegraph | Posted: 23 Feb 2017
"IF I was a litigation lawyer I would be rubbing my hands at this."
That was the take on the business rates shake-up proposed by Government from a prominent Humber-based chartered surveyor.
Lawrence Brown is managing partner of Scotts, with offices in Grimsby and Hull.
He was casting his eye over changes that could see businesses effectively blocked from appealing against big rises in rates – a move which leading bodies claim could be illegal.
A total of 13 business groups have signed a letter warning of the dangers to small firms should the Government shake-up go ahead, with the issue making national headlines last week.
More than 500,000 cafes, shops, hotels, nurseries, schools and hospitals across the country will pay up to 300 per cent more from April, following the first revaluation of business rates for seven years.
And under the reforms, business owners could be prevented from appealing against the bills if they are within a "margin of error" which experts have claimed may be as high as 15 per cent.
Mr Brown said much of the consternation was around the method of redress if rate levels were seen as wrong.
"We are moving to check, challenge, appeal, and it is a lot more onerous on the rate-payer.
"There is also a bit on an anomaly if the Valuation Office Agency over assess a property. You may be successful in an appeal, it may be that you are paying £25,000 instead of £23,000, but would this be a reasonable margin of error?
"What is reasonable? It is going to be subject to so much litigation. If I was a litigation lawyer I would be rubbing my hands at this."
HIGH HOPES FOR HIGH STREET: Lawrence Brown, left, in his role as chair of the North East Lincolnshire Visitor Economy, Services and Retail Group, at Cleethorpes' Ministerial visit from Andrew Percy MP, centre, following success in Great British High Street. Also pictured, Anna Darnell owner of Abode, Cllr Peter Wheatley; Cleethorpes MP Martin Vickers and Conservative leader on North East Lincolnshire Council, Cllr Philip Jackson.
Business groups including the British Retail Consortium, the Confederation of British Industry and the Federation of Small Businesses, say this could be illegal under local government finance laws.
The Government is still dealing with 280,000 appeals against business rate hikes from the last change in 2010 – a total which is likely to soar in the coming weeks.
Under current law, all appeals must be considered. But new rules due to be passed before April would mean only businesses that claim their rate is wildly inaccurate would have it rectified.
If the disputed amount is within a 'margin of error' the appeal could be rejected. Experts understand this will be around 15 per cent but the Government denies there is a specific limit and insists officials will use their professional judgment.
The move was seen as a bid to reduce the seven-year backlog of appeals, which is expected to balloon from April when businesses can appeal against the new rates.
"Business rates are a tax, and taxes are meant to be fair," Mr Brown added. "There will be a great number of occupiers who will have multiple premises. They maybe premises that aren't that big, but they have lots of them. What if each is out by 10 per cent at every single location? It is just wrong."
Mr Brown also voiced concern about businesses receiving the backing of their local authority when it came to fighting perceived wrongs.
"With Government changes local authorities will soon keep the business rate take to fund core services. Before, a local authority may have been supportive if rates were over-assessed, to support them to grow, to keep the cost of occupation low. Now it will be them receiving the business rate will the local authority have that will?