Tax Based on Opinion
The assessments that form the basis of your business rates liability are effectively an opinion of the rental value of your property that has been produced by an officer of the Inland Revenue.
The tax is therefore based on an opinion, albeit usually a reasonably well informed one, and is open to challenge.
The most usual method of challenge is to lodge a ‘Proposal to Alter the Rating List’ with the Valuation Office. Once validly served, and assuming the Valuation Officer doesn’t agree with the proposed alteration, the proposal is transmitted to the Valuation Tribunal as an appeal.
Proposals served on the Valuation Office are generally placed in a programme that prescribes a Target Date. This is a date by which negotiations on the appeal should be concluded. The purpose of the programming system is to ensure that all of the appeals made by ratepayers on the same class of property in a given locality are heard at the same time thus ensuring all of the evidence is heard when considering the case.
If negotiations cannot be concluded by the Target Date, the appeal will be listed for hearing by a Valuation Tribunal. The Valuation Tribunal is an independent body set up to adjudicate in disputes between ratepayers and the Valuation Office. Once the Tribunal has decided a case the matter can be appealed to the Lands Chamber of the Upper Tribunal and higher courts on matters of law.
The majority of proposals are resolved without the need for a Valuation Tribunal hearing. However, the partners of Bayram Vickery Meech are all experienced Chartered Surveyors and have a proven track record of success before the courts.
Grounds of Appeal
Appeals can be lodged on a number of grounds:
To challenge the underlying value adopted.
Every non-domestic property in Great Britain was valued for rating purposes by the government with effect from 1 April 2010. These valuations reflect the open market rental value of each property as at 1 April 2008. If the Valuation Office can be persuaded that this valuation was excessive the business rates liability will be reduced.
Liability can be saved for the full period from 1 April 2010 through to 31 March 2017, and often beyond.
To change the rateable value following physical changes in the locality of a property.
The level of rental value adopted in this Rate List generally reflects the physical circumstances as at the beginning of the Rate List period. However, it can be argued that adverse physical changes to the property or its locality can reduce the level of value for rating purposes. To be effective, the changes usually have to last at least three months.
There are a number of material changes of circumstance (MCC’s) that might result in temporary, or even permanent, reductions in rateable value. These could be:
Adjacent demolition or building works
Nearby road works
For retail premises, major changes to traffic flow that materially impact trade
For retail premises, the opening of major new developments that materially affect levels of trade
A significant increase in the supply of accommodation that results in a subsequent decrease in rental values
Many Bayram Vickery Meech clients have received significant reductions in liability as a result of work on MCC appeals.
To delete assessments
If a property is demolished or undergoes substantial refurbishment works the assessment may be deleted from the Rate List, reducing the liability to zero. Cases in this area are often technical and some are controversial. For example retail units undergoing split or merger activity can often be deleted during the construction period as can office refurbishments where certain conditions are met.
If the Valuation Office bring a building into assessment before it is occupied and without a valid Completion Notice being served by the Local Authority, appeals to delete can often succeed and remove liability altogether until the date of actual occupation. Appeals against the Completion Notices themselves, which must be made within 21 days, can often be used to great effect.
To alter the extent of the assessment
Where additional space is acquired or control of space is relinquished appeals may be required to adjust the unit of assessment. Very often technical arguments can be deployed to reduce the aggregate level of assessment. Examples of this would include achieving fragmentation, configuration, quantum or hybrid property allowances.
If you have any questions relating to appeals process or would like Bayram Vickery Meech to lodge a proposal or act on your behalf in relation to an existing appeal, please contact us.