More than 133,000 businesses are still waiting for an
appeal of their business rates valuation from 2010 to be
resolved, council leaders reveal.
More than 1 million businesses have challenged their
business rates bill since 2010. The Local Government Association
said figures published this month show 133,060 appeals have still
yet to be ruled on.
Councils do not set business rates or rule on challenges by
businesses making appeals. But the result of appeals is that
councils must put money aside from delivering the
services that local taxpayers pay for and expect until appeals
are decided.
The LGA said councils have been forced to divert £2.5
billion away from stretched local services over the past five
years to cover the risk of business rates appeals, as they have
to fund half the cost of any backdated refunds.
Ahead of a Westminster Hall Debate today (Wednesday) on
business rates, the LGA is calling on the Government to take the
financial risk from business rates appeals away from local
government.
The LGA said government plans to allow councils to keep
more of the business rates they collect, a move which has been
long-called for by local government, makes it even more
imperative for reform of the system to protect councils from the
growing and costly risk of appeals. This is because they may
become liable to pay back even more of the cost of any backdated
refunds.
Council leaders are also recommending a time limit for
appeals, except in exceptional circumstances. In Scotland, there
is a six month time limit for businesses to appeal their
valuation.
Alongside reviewing the process for appeals and clearing
growing backlogs, the LGA is also urging the
Government to:
- Modernise the way business rates affect different
ratepayers, to ensure that sectors such as online businesses make
a fair contribution and that councils are given maximum
flexibility on reliefs.
- Tackle the issue of business rates avoidance, which the
LGA estimates leads to the loss of £230 million each year.
Cllr John Fuller, Vice Chairman of the Local Government
Association’s Resources Board, said:
“Ongoing delays in tackling business rate appeals from 2010
are heaping further financial uncertainty and pressure on our
local services at a time when every penny counts towards giving
councils the best chance of protecting services over the next few
years.
“It is right that a business is able to challenge their
valuation if they genuinely believe it to be
incorrect.
“Despite not setting business rates or ruling on appeals,
councils are having to take billions of pounds away from already
stretched local services, such as adult social care, protecting
children and supporting businesses and boosting local growth, to
cover the financial risk and uncertainty arising from this
backlog of appeals. This is completely unfair.
“As we move towards a system where councils will keep more
of the business rates they collect locally, communities need to
be protected from the shifting of resources to address the risk
of business rates appeals. With local government in England
facing an overall funding gap that will exceed £5 billion by
2020, this money is needed to fund vital services and help plug
growing funding gaps.”
NOTES TO EDITORS
-
Latest figures on unresolved business rates challenges
(appeals) under the 2010 list can be
found here.
-
You can read our full parliamentary briefing for the
Westminster Hall debate on business rates here.
