News and Insights

Stay informed with the current Business Rates news, insights and market trends

Goodman Nash’s Board Director, Alan Weston BSc MRICS, provides his response to the government’s Business Rates Review: Technical Consultation. The document is split out in six chapters, covering topics including the proposed information provision system and improvement relief. Click here to read the full response.

Like it or not the Conservative Government is wedded to the business rates system. The Labour Government wishes to abolish it but has provided no ideas how it would balance the books – at this stage in the political scrimmaging it doesn’t need to! Listening to the Budget statement from the Chancellor Rishi Sunak it gave little detail to some of the sweeping changes ahead for businesses looking to budget for the their future business rates liabilities… Click here to read GN’s review.

The latest consultation on business rates reform published 30th June 2021 tells us that business rates are here to stay. It also clearly sets out the Government’s intended changes… Click here to read GN’s report.

The announcement on the 25th March 2021 by the Government to effectively pull the rug under the estimated 400,000 COVID-19 Rating Appeals in the English system, was made just two days after it issued its much-criticised Interim Report on the Fundamental Review of Business Rates… Click here to read GN’s report.

The Government have in the last few days taken the extraordinary step to change the existing law with regards to reducing Rateable Values; specifically, to disregard any impacts COVID-19 may have had on rental values. A contingency fund is instead to be distributed by local Councils to businesses through a discretionary grant system, and while the exact mechanisms are yet to be announced, these are likely to vary between different Council regions.

This unprecedented step unfortunately means there is no prospect of reflecting the impacts businesses have felt over the last year as a result of COVID-19 on Rateable Values.

To read the Governments click here.

The much anticipated 2021 Budget has been announced by the government, giving business owners further insight on what to expect in the upcoming financial year. The commercial impact of the pandemic was once again a central topic, with many measures introduced or extended to help businesses and protect jobs. As with every year, business rates found their way into the budget, with a focus on the continuation of specific reliefs and exemptions to support ratepayers.

Click here to read the GN 2021 Budget Insight Report

This document provides an outline the main takeaways from the budget, to assist business owners on what they can do to relieve their financial costs.

BSc, MRICS Board Director
12 March 2021

In February 2019 the Treasury Committee launched an inquiry into Business Rates to scrutinise how Government policy has impacted business. The Committee will examine how Business Rates policy has changed, including Business Rates retention, alternatives to property-based taxes, such as the proposed digital services tax, and how changes to Business Rates could impact businesses.

This Committee has taken written submissions (closed April 2019) from interested parties and organisations including from the Local Government Association alongside various invites to appear in person before the Committee.

Click on the link below to keep informed.

BSc, MRICS Board Director
8 July 2019

In the last 12 months, three Court decisions have provided clarification on some of the Empty Rate Mitigation Schemes being deployed to lessen liability to business rates. Two successes for the ratepayer’s against v one success for the Council.

In July 2018 the High Court ruled in Principled Offsite Logistics Ltd v Trafford BC that the occupation by POL for 6 weeks for the purpose of triggering an exempt void period of 3 or 6 months (as relevant) was sufficient in order to meet the beneficial occupation criterion. The Council unsuccessfully argued that the beneficial test was not met because POL had an intention to occupy with a view to achieving a share of the rates savings with the freeholder. Thus the status quo remains that occupations under tenancy at will arrangements remain a sound strategy to mitigate such liabilities.

The decision In Rossendale Borough Council v Hurstwood Properties confirmed the legitimacy within a rating context for the creation of Special Purpose Vehicles set up for the sole intention of avoiding empty rates through lease structures but the being placed in liquidation. The court failed to accept the “sham” argument put forward by the Council, nor were they prepared to lift the corporate veil to effectively put the liability back to the owner.

Success however came for the Council in the My Community Space v Ipswich Borough Council where the charity failed to establish that its occupation was wholly or mainly used for it charitable objectives. To that extent it failed to be entitled to the 80% mandatory relief during the periods when it held art exhibitions.

GN continue to advise clients wishing to contemplate deploying empty rate mitigation schemes and ensure we keep abreast of the developing law. Behind the scenes the Government continues to consider what action it may want to take in the future to tackling what is sees as avoidance but with the current wider review by the Treasury Select Committee taking place on the whole question of the suitability of business rates, GN are not anticipating any developments too soon.

BSc, MRICS Board Director
4 July 2019

The subject matter drew a 3 to 2 majority in Telereal Trillium v Hewitt (VO) 2019, which concerned the value to be placed on a substantial office building known as Mexford House in the North Shore area of Blackpool which had been vacant since 2009/2010. The Valuation contended successfully for £370,000 and the ratepayer for £1.

In many ways this was a strange dispute because evidential arguments surrounding supply and demand were not able to be tested before the Court because of the existence of a joint positioning paper agreed between the parties. GN’s technical Director (Alan Weston) doubts the decision will have much practical relevance, believing that the situation remains as is, in that to effectively remove liability to business rates in similar circumstances requires proof that the building has actually reached the end of its economic life rather than it just being unloved.

BSc, MRICS Board Director
27 June 2019

Having lost in the Court of Appeal the Valuation Office Agency has successfully petitioned the Supreme Court to rule on the thorny matter of determining who should be the ratepayer of ATM’s, the machine provider or the host supermarket, shop, petrol station where they are located. If the former applies the ATM site becomes separately rateable, otherwise there is no separate assessment. The decision matters because retailers are reportedly footing a bill in excess of £200 million pounds whilst they remain currently separately assessed. More pressure heaped on the retailers when it is least wanted.

GN and other rating practitioners await the future hearing and decision with interest as it will have much wider ramifications where businesses effectively share a common site.

BSc, MRICS Board Director
19 June 2019

Our Board Director Alan Weston BSc MRICS is pleased to announce that his recent application to become a member of the Rating Surveyors’ Association has been accepted and Alan looks forward to being an active member of the organisation.

The RSA represents an important voice in the world of business rates and is frequently consulted by Government on matters of policy and in assisting the drafting legislation and Regulations. Working with the RSA will enable GN to provide an enhanced level of service to our customers, allowing us from time to time to jointly engage on pre- challenge protocols with other agent representatives as well as giving us access to a myriad of committee negotiated rating settlements. It’s a win – win for our clients.

BSc, MRICS Board Director
3 December 2018

The Bill Rating (Property in Common Occupation) 2018 has now received Royal Assent, but we still awaiting the publication of the over arching Regulations that will provide the detail regarding the proposed 12 month window to submit “proposals” to enable back-claims to be made as far back as 1 April 2010. What we do know is that it is not simply a matter of all those properties that were split into two or more units being merged back into a single assessment to restore the “status quo”. Contiguity in both the horizontal or vertical planes (see previous articles) must properly exist, but the scheme is also open to those properties that meet the test but were not hitherto split into multi-assessments.

Merging assessments can help reduce rate bills, and sometimes very significantly, if rate reliefs or quantum discounts can be applied, but note there are unlikely to be any significant benefits if they do not apply.

Please call us if you wish to know more or how we might be able to assist you.

BSc, MRICS Board Director
1 November 2018

The fate of our High Streets were back in sharp focus in this Budget, with growing concerns that many anchor tenants such as, M & S, House of Fraser and Debenhams are considering a number of Store Closures, alongside other retailers entering into Company Voluntary Arrangements to shed some of their poor performing Stores.

From April next year, the Government proposes to discount rate bills by 1/3rd across rate years 2019/20 and 2020/21 for “retailers” with a Rateable Value below £51,000. Whilst the detail is awaited, it is expected to follow the same path as other Retail Relief schemes which have come and gone, where the discount will only be applied to those retailing goods such as shops, pubs, restaurants and cafes, and not to those selling professional services, such as estate agents, insurance brokers, banks etc. Despite the sound bites it is not likely to be restricted to High Street locations, but retailers in all locations.

The Government also intends to consult on the treatment of second homes that are made available to let as holiday cottages, where it has concerns over the tactical steps undertaken by some taxpayers to shift liability to business rates from council tax, whereby all liability to either tax can be avoided. This is a rather unusual focus where frankly so much more could be achieved were Government and Local Government to concentrate their efforts regarding false claims relating to small business rate relief in general. The Government is very supportive to small businesses, and second home owners who genuinely attempt to let their holiday unit currently for more than 140 days a year have nothing to fear. They are lawfully entitled to such business support being legitimate business where profit and loss accounts are submitted to the HMRC, and therefore should be treated as a business like anyone else. We do not envisage any swift conclusion to such a consultation and would predict no changes, this side of any new Revaluation that is planned for 2020. Goodman Nash is a named professional services provider to some of the largest names in the holiday industry, and enquiries from such owners are welcomed.

Last, but not least, a sense of common sense has been restored and our local authorities will no longer pay business rates on their operational toilets – but will that be enough to keep them open! Only time will tell.

Note these measures relate to commercial properties paying business rates in England only, and that differing rule sets continue to apply in Wales and Scotland.

BSc, MRICS Board Director
1 November 2018

As part of the Government’s Spring Statement it was announced that the 2017 Rates revaluation will not last until 2022 as previously stated, but until 31 March 2021 instead. This is part of the government’s commitment to the move towards more frequent rates revaluation.

Goodman Nash welcomes this change, which will help business owners tackle the excessive burdens that were previously imposed on them resulting from the previous seven year revaluation period. This change marks a step in the right direction.

In the meantime, Goodman Nash will continue to offer advice to business owners on how to minimise liability to business rates, whether that be via the submission of formal proposals against rateable value or ensuring the myriad of reliefs and exemptions are sought.

BSc, MRICS Board Director
21 March 2018

The Government published a Consultation on 29 December 2017 headed “Business rates in multi-occupied properties”, which seeks to re-instate the practise of the Valuation Office Agency that occurred in the determination of the rateable unit of assessment in multi-occupied commercial properties, and effectively overturn the decision reached by the Supreme Court in Woolway(VO) v Mazars. Following that decision the Valuation Officer has been dividing up large numbers of assessments throughout England and Wales, which were hitherto assessed as one rateable unit. Thus where a single tenant occupied for example the 1st and 2nd floors of a 5 storey office building, prior to the Supreme Court decision they were assessed as one (on the basis that they were contiguous to each other via the floor plates effectively touching each other) post decision they have become two separate rateable units. Similarly, two adjoining offices within a business centre would previously be treated as a single unit because they are said to be contiguous to each other. The “touching” requirement works both in the vertical and horizontal plane.

This separation of assessments can in some (but definitely not in all cases) have some detrimental effects by increasing the liability of the ratepayer. Those situations where rate bills go up typically relate to the loss of the quantum allowance that arose on the single assessment; which may have been removed in total or in part. Increased liability may also arise where the separation means that some rates relief previously enjoyed is removed, and this has affected a number of small businesses. Minor increases have also occurred where the effects of rounding in the valuation has led to a minor increase in the aggregate rateable values when compared with the single assessment.

Conversely some ratepayers have in fact seen their bills reduced through the splitting of assessments, through being placed in a more favourable transitional relief scheme by moving from one Transition Band into another, or by rateable values of some parts now falling under the small business rate relief scheme.

The Consultation is accompanied by a draft Bill and proposes to allow the ratepayer to elect whether they wish to undo the division.

We will post an update after the Consultation which ends on 23 February 2018.

BSc, MRICS Board Director
1 February 2018

Our congratulations go out to Kevin Cummins who has recently passed his exams in the business rating section of the IRRV (institute of Revenues Rating & Valuation) Level3 Qualification.

Kevin’s chosen assignment was titled “Effect and Implications of the 2017 Revaluation”; a matter well understood by us here at Goodman Nash.

BSc, MRICSBoard Director
1 February 2018

Telecoms Infrastructure (Relief from Non-Domestic Rates) Bill 2017 and consultation (12 weeks from 29 August 2017)

The draft regulations propose to give 100% rates relief to the proportion of a network that is attributable to new full fibre infrastructure and associated rateable plant and machinery installed and lit after 1 April 2017. This will apply to the Local and the Central rating lists in England only and will be applied by Certification of the RV attributable to the new infrastructure by the Valuation Officer.

The Certificate can be appealed by an interested person and determined by the Valuation Tribunal for England.

In the case of an error in the Certificate, a new Certificate can be issued by the VO, replacing the original certificate and deeming any appeal as withdrawn. The Certificate will have effect from the date specified by the VO so any MCC changes should lead to a new certificate being issued at the effective date of the MCC.

Amendments will be made to the Transition regulations to allow the new full fibre relief to be applied as well as transition.

The relief is aimed at supporting the roll out of new full fibre infrastructure and 5G mobile sites for the life of the 2017 list.

The Barclay review report on the non-domestic rating system in Scotland was published yesterday (22 August 2017).
The aim of the report was to support business growth, long term investment and reflect changing marketplaces.
There are no radical changes to the Scottish rating system proposed in the 30 recommendations from Barclay in his review but a few contentious ones including the restriction of Charity and Sport Club relief. The recommendations are split into three main subject areas:

1. Measures to support economic growth.
Business Growth Accelerator – A twelve month delay in bringing new properties into rating and to changes to improved properties.
Revaluations every 3 years after 2022 with a one year Antecedent Valuation Date.
Reduction of the Large Business Supplement.
New relief for day nurseries and Town Centres supported by Fresh Start Relief.
A review of Plant and Machinery rating with a focus on renewable energy and statutory improvements.
The effectiveness of the Small Business Bonus Scheme should be evaluated.

2. Measures to improve ratepayer experience and administration of the system.
Scottish Government Road Map to explain changes and their timing.
Better information provided to ratepayers and more transparency and consistency of approach.

Publish a full list of recipients of rates relief.
A “rateable value finder” to identify unassessed properties.
Civil penalties for the non-provision of information rather than a Criminal charge.
Standardised rates bills, quicker processing of refunds and quicker process of debt recovery.
Reform the appeals system to reduce volumes and increase transparency.

3. Measures to increase fairness and ensure a level playing field.
Anti avoidance rules created and to increase the Empty Property reset period from 42 days to 6 months.
Self catering properties must have an intention to let for 140 days and actually let them for 70 days.
Scottish Government responsible for checking rates reliefs awarded.
Charity and Sports Club reliefs reformed and restricted, relief for empty listed buildings restricted to 2 years.
Focus reliefs on economically active properties and Increase liability for long term empty properties.
All properties should be entered on the Valuation Roll except public infrastructure and current exemptions replaced by a 100% relief.
Large scale commercial activity on agricultural land and on exempt parks to pay rates.

The report will now be considered by the Scottish Government.

The UKUT(LC) handed down its decision on the valuation for business rates of the City Council’s offices at Station Rise, York on 6 July 2017.

The main issues were the rent per square metre and allowances for quantum, lack of car parking, Grade II listing, layout and split floors.

The Judge rejected the agent’s arguments for a split rent per square metre for the new and the old parts of the refurbished and extended building, rejected the quantum, lack of car parking and Grade II Listing allowances but did allow a 7.5% allowance for layout and split floors.

The judge also commented that the valuer for York City Council should have seen that the allowances, in total, looked unreasonable on a stand back and look basis and preferred the Valuation Officer’s evidence and approach in the main.

GN’s own Tom and Alex congratulated by Ian Ferguson, the President of the IRRV, at the Wessex AGM for achieving their IRRV (Tech) Level 3 Business Rates certificates.

UKI (Kingsway) Ltd v Westminster City Council [2017] EWCA Civ 430

The property, 1 Kingsway, London was unoccupied after redevelopment and not fully completed. Westminster City Council served a Completion Notice by hand on the receptionist of the building manager who was not authorised to accept legal documents by the “owner”. The receptionist passed on a scanned electronic copy to the “owner”.

The Court of Appeal ruled that service of the Completion Notice was not legal service on the “owner” under the statutory scheme, despite the fact the Completion Note was transmitted electronically to the “owner”.

The ratepayers appeal was allowed.

The UKUT (Lands Chamber) decided the York Museum appeals on 23 May 2017.

The case involved first deciding the units of assessment for 3 York Museum sites following the Mazars Supreme Court decision. The Museums were occupied by a Trust and the shops and cafes were operated by a wholly owned subsidiary company. At one site the shop was decided to be a separate hereditament to the Museum but at another Museum the sites of the shop and cafe were not readily ascertainable and therefore included in the Museum assessment. Each site was decided on its own facts on the definition of the hereditament and paramount control, following the Mazars principles.

The main valuation dispute was whether a Receipts and Expenditure (R&E) valuation was appropriate or a Contractor’s basis (CB)? The Tribunal decided that R&E was the correct approach. The site that was operating at a loss was valued at £1. Cross subsidising the museums was not allowed as each site had to be valued individually. However, grants and gift aid receipts could be taken into account.

A minor argument on the exemption of the grounds as a park was not decided as it had little effect on the valuation and the parties had not sufficiently argued the issues.

The main valuation dispute was whether a Receipts and Expenditure (R&E) valuation was appropriate or a Contractor’s basis (CB)? The Tribunal decided that R&E was the correct approach. The site that was operating at a loss was valued at £1. Cross subsidising the museums was not allowed as each site had to be valued individually. However, grants and gift aid receipts could be taken into account.

A minor argument on the exemption of the grounds as a park was not decided as it had little effect on the valuation and the parties had not sufficiently argued the issues.

The Upper Tribunal (Lands Chamber) handed down its long awaited decision on ATM sites at Supermarkets on 12 April 2017.

The Judges held that the external facing, hole in the wall, ATM sites were separately rateable to the host retail store and were occupied by the Banks. However internal ATM sites within the store were in paramount occupation by the store operator and are not separately rateable.

It was interesting to note the Judges comments in that the presence of the ATM (non-rateable Plant and Machinery) defined the site and was only ignored in respect of the valuation.

The decision was unsurprising, although disappointing for the Banks and the Supermarkets.

It is likely that leave to appeal the decision to the Court of Appeal is likely to be granted.

All non-domestic properties in England and Wales have been revalued for the new 2017 rating list by the Valuation Office Agency (VOA) and by the Scottish Assessors for properties in Scotland.

The new 2017 Rateable Values go live on 1 April 2017.

The 2017 appeal system remains much as it was in Scotland and Wales but there has been a radical change in the system in England, known as “Check”, “Challenge” and “Appeal” (CCA).

The CCA system in England:
The system has gone digital with a series of on-line processes to undergo before getting to an actual appeal. The first stage requires registration on the Government Gateway through the HMRC Portal, for the VOA service.

This Registration process is required for each individual property:
Stage 1: Register personally on the HMRC Portal with evidence such as National Insurance number.
Stage 2: Register your business name and address.
Stage 3: Identify your property on the VOA website and register your interest with supporting evidence.
Stage 4: Identify your agent (if instructed) with a special code to allow the agent to act on your behalf.
Stage 5: Request the information held by the VOA on the property – On-line access to VOA data.

The “Check” stage can only be entered once the Registration process has been completed. It is not compulsory to undertake a “Check” if you do not want to “Challenge” your Rateable Value (RV).

The CCA Process:
“Check”: Requires validation of the VOA’s property survey details and full disclosure of all physical changes to the property. In most cases this will require a new survey to be undertaken. The VOA can increase or decrease the RV following a “Check”. This is basically a self assessment survey and there will be penalties and fines if this stage is not completed within reasonable accuracy.

“Challenge”: This can only be progressed when the VOA has accepted the “Check” or a default twelve month period has elapsed. A “Challenge” can only be instigated within 4 months of a completed “Check”. The onus is on the ratepayer or their agent to provide a full and comprehensive statement of case with valuations, evidence, comparables, case law and legal arguments etc. Only then will the VOA disclose their evidence to support their valuation and consider the “Challenge”. The VOA will issue a decision on the “Challenge” within 18 months.

“Appeal”: An appeal can be made to the Valuation Tribunal for England (VTE) within 4 months of the VOA decision notice or after 18 months have elapsed from the date of the “Challenge”. The Ratepayer (or their agent) has to submit the full bundle of evidence and correspondence to the VTE. In addition, a fee of £150 for a small property and £300 for any other property, is payable by the ratepayer for submitting an “Appeal”. If successful, the fee will be refunded in full or in part (in part if decided without an oral hearing).

The new CCA system puts a greater onus on the ratepayer to progress a disagreement to an appeal.
The regulations that amend the 2010 appeals regulations are complex and run to some 15 pages!
The new CCA system is designed to reduce the number of appeals against the rating list.
No doubt there will be delays and problems with the new system as it beds in.

The main points announced by the Chancellor on Business rates in the March 2017 budget:
• Business Rates raises £25 billion pa in revenue.
• A move to introduce a Rates Tax on the digital economy (on-line sales?).
• Consultation on Revaluation intervals before next Reval (2022).
• 3 measures to help small businesses in England:
– Properties coming out of SBRR in 2017 – bills capped at +£50/month or transitional cap, whichever is lower.
– Pubs with RV greater than £100,000 (90% of pubs in England) to get £1,000 discount in 2017.
– £300 million fund for BAs to fund discretionary relief – (apportioned to BAs by formulae).
• Total cut of £435 million in business rates.
The Supreme Court handed down a very important rating decision today and reinstated the Lands Chamber decision in the Newbiggin v Monk case today.

This means that the RV of property undergoing reconstruction, that is incapable of beneficial occupation, should be reduced to £1. The principle of reality won over the repairing assumptions in Schedule 6 of the Local Government Finance Act 1988.

The Non-Domestic Rating (Chargeable Amounts) (England Regulations 2016 – SI 2016/1265) made on 21 December 2016 and comes into force on 22 December 2016 to introduce the new transitional rules for the 2017 rating list.

Following GNs representations to DCLG, the 2005 transitional scheme will now be revoked on 1 April 2017 and not on the day after the regulations were made as was the case in previous Chargeable Amounts regulations. This gives ratepayers and agents up to 1 April 2017 to obtain 2005 list transitional certificates from the VOA.

The 2017 transitional rules are as expected from the draft regulations in the consultation are:

Large Properties with RV greater than £100,000

Rate year starting Cap on liability Increase Cap on liability reductions
1/4/2017: +42% -4.1%
1/4/2018: +32% -4.6%
1/4/2019: +49% -5.9%
1/4/2020: +16% -5.8%
1/4/2021: +6% -4.8%

Medium Properties with RV greater than £28,000 in Greater London and RV greater than £20,000 outside Greater London and RV less than or equal to £100,000:

Rate year starting Cap on liability Increase Cap on liability reductions

1/4/2017: +12.5% -10.0%
1/4/2018: +17.5% -15.0%
1/4/2019: +20.0% -20.0%
1/4/2020: +25% -25.0%
1/4/2021: +25% -25.0%

Small Properties with RV less than or equal to £28,000 in Greater London and RV less than or equal to £20,000 outside Greater London:

Rate year starting Cap on liability Increase Cap on liability reductions
1/4/2017: +5.0% -20.0%
1/4/2018: +7.5% -30.0%
1/4/2019: +10.0% -35.0%
1/4/2020: +15.0% -55.0%
1/4/2021: +15.0% -55.0%

The new Chancellor’s first and last Autumn statement was given to Parliament today (23 November).

The announcement on business rates are:
• New 100% rates relief for new full-fibre infrastructure from 1 April 2017 for 5 years
• Rural relief to double to 100% to remove the inconsistency with Small Business Rates Relief
• The Multiplier (UBR) for 2017/18 to be 47.9p for large businesses and 46.6p for small businesses
• An adjustment to the transitional relief arrangements for the 2017 list with the upwards phasing cap for large properties reduced from 45% to 42% in year 1 and reduced from 50% to 32% in year 2.

RV changes for 2017:
High level analysis by VOA confirms RV’s in London will increase the most, followed by the Southeast.
Most other regions show RV falls for all classes apart from “Other” that have generally increased.
The “Other” classes may include mainly Contractor’s basis valuations and reflect increased costs of construction.

Total RV in England will increase by 9.1%
London has increases in all classes: Retail +26.2%, Office +21.2%, Other +25.7%, Industrial +15.1%
Outside London in England:
Retail has fallen up to -6.8% in all regions other than East Midlands +4.7% and Southeast +1.4%
Office has fallen up to -13% in all regions other than East Midlands +7.8%, Southeast +7.7% and East +2.4%
Industry has increased in all regions by up to +6.5%, other than Northwest which fell by -3.1%
“Other” classes show increases across the board from +6.6% up to +17.5%
Total RV in Wales will decrease by -2.9%
Wales: Retail -8.8%, Office -7.0%, Other +4.7%, Industrial -4.0%

It is unlikely that there will be any transition in Wales, as is the case for 2010 list.
The transitional position in England is interesting in that only London (all classes apart from perhaps Industrial) will benefit from upwards phasing.
Upwards or downwards transition is likely to only affect the Southeast “Other” class but only for a year (assuming +12.5% + RPI).

This is a radical change in the Rating Appeals system.
The main changes are:

1. CCA replaces the current appeal system in England for the 2017 list onwards with new time limits.
2. The new system is designed to reduce appeals submitted to the VTE.
3. A blunting proviso has been sneaked in by defining “inaccurate” as “within reasonable professional tolerances” (parameters not defined!).
4. Checks will require disclosure and agreement of all relevant facts with the VO. (Eg: If there is an extension not included in the valuation, the ratepayer will be required to disclose it when submitting a check to the VO.)
5. Challenge is the new Proposal. The VO will only provide rental details in response to the proposer’s submissions. This amounts to almost a full statement of case being provided by the proposer at the Challenge stage with evidence, valuations and submissions.
6. A proposal requires current annual payment details under a lease, easement or licence, including the annual amount, the date the payment is from and any rent free periods.
7. Invalidity has been replaced with “incomplete proposal”– VO has discretion to determine a challenge is incomplete.

8. Only evidence and submissions made at the Check and Challenge stages will be considered by the VTE on appeal.
9. Introduction of appeal fees – at the appeal stage (Small businesses £150. Other businesses £300). Fee is refunded only if VTE orders a list alteration and can be reduced to £100 and £200 if no oral hearing.
10. Introduction of penalties for providing false information – knowingly, recklessly or carelessly (Small businesses £200, Other businesses £500). Appeals against penalties to the VTE.

The VO is likely to publish details only from when an assessment is subject to a Challenge.
A subjective definition of “inaccurate” as “within reasonable professional tolerances” may prevent many list alterations for minor MCCs such as building works. There will be a question of whether the definition of “inaccurate” will apply to VO list alterations by VO notices as well as ratepayer appeals?

Click here to read the published article

The VOA has issued additional guidance on the effect of the Mazars Supreme Court decision with some examples. Click here for more.

Nothing unexpected here as the VOA has basically gone down the route of separate assessments whenever an occupier has to go through common parts to get to other accommodation. If a building has only one occupier using the common parts it will be one assessment.

Two more DCLG Consultations published in July 2016.

1. Self-sufficient local government: 100% Business Rates Retention
2. Business Rates Reform. Fair Funding Review

1. Self Sufficient local government: 100% Business Rates Retention.
Government is committed to 100% rates retention by the end of the current Parliament as an incentive to promote growth.
A tailored system to share and manage risks with Combined Authorities and with elected Mayors.
Grants to be phased out and additional responsibilities to be devolved.
£12.5 bn extra income to be made available to Local Authorities.
100% rates relief pilots in Manchester, Liverpool and London.
Reduce burden on small businesses.

Appeal reform with Check, Challenge and Appeal with provisions for uncertainty.
Remove high value, high risk assessments from local lists.
Income protection and safety net.
Flexibility to reduce the multiplier.
Infrastructure levy open to Combined Authorities and elected Mayor authorities.
National and local accountability and balancing budgets.
Responses are due by 26 September 2016

2. Business Rates Reform. Fair Funding Review:
Following the government’s proposal for 100% rates retention, DCLG published a Consultation in July 2016 on the needs assessment formulae that will replace central government grant funding for local authorities.
Responses are due by 26 September 2016

A Government summary and responses to the Check, Challenge and Appeal consultation was published in July 2016.
The government is committed to improving the business rates appeal system with a more swift, structured and transparent on-line system.
Will the government achieve this goal? Predictably, Billing Authorities were mainly supportive while Rating Agents were mainly sceptical.

However, the government has decided that the system as described in the consultation document will go ahead mainly as proposed.
• On-line accounts for verified ratepayers who can view, confirm or amend their data at any time
• Streamline process of moving direct to Challenge if ratepayer confirmed on-line data within 4 months
• If the ratepayer disputes the on-line data, the VOA has 3 months in which to respond
• Check moved to Challenge automatically after 12 months
• Ratepayer to provide evidence on:
i) Grounds of the challenge.
ii) alternative valuation.
iii) Supporting evidence and statement
• If the VOA disagrees they will provide tailored information in response to the evidence submitted by the ratepayer (or agent)
• Move from Challenge to Appeal stage in 18 months unless an extension is agreed
• Restriction on introducing new evidence at the Appeal stage
• No charges for the Check and Challenge stage but a maximum fee of £300 for the Appeal stage
• Penalties up to £500 administered by the VOA for providing false information at the Check and Challenge

stages with appeal to the VTE
• Fast tracking system with reduced fees for small businesses
• Pre-Challenge clearance system for groups of ratepayers in the same location outside the formal Challenge process
• New system in place from 1 April 2017 but not retrospective for the 2010 list

Three areas requiring further attention by the government are:
1. Involvement of Billing Authorities in the Check, Challenge and Appeal Process
2. Appeals to the UKUT(LC) on a point of law only
3. Transparency of the VOA’s information behind their valuations

Transparency of the VOA’s data behind their 2017 Revaluation schemes is essential to the new system working.
The next step is for the government to produce draft regulations for Check, Challenge and Appeal for further consultation.

Reforming business rates appeals
Check, Challenge, Appeal – Reforming business rates appeals

No doubt Local Billing Authorities and ratepayers would also like clarity from the government on the effect of Localism with £26 bn of business rates at stake from 2020. From 2020 Local Billing Authorities will be able to collect 100% business rates in their area but the down side is that the revenue support grant will be abolished, more responsibility devolved to them and there will also be some re-balancing of the distribution of rates between Billing Authorities.

The rating system will not quite go full circle from pre 1990 days when Local Authorities set their own rates poundage. It looks like the government will still set the uniform business rate (UBR) but allow Billing Authorities to cut the UBR and charge a limited supplement for specific infrastructure projects. I cannot see any Billing Authority cutting the UBR in these difficult times of spending cuts.

Click Here for more on this article

Localism details are sketchy and the Devil is always in the detail. No doubt there will be Local Billing Authority winners and losers under the Localism agenda. However, the business rates system is set up to collect the same revenue in total so ratepayers may not see any real benefit.

The Government has announced, in the 16 March 2016 budget, additional relief for small businesses by making 100% small business rates relief permanent from April 2017 for a single small business property valued at £12,000 RV or less. Tapered relief will be available up to a RV of £15,000. The small business multiplier will also be extended to properties valued at £51,000 RV or less. We are still waiting to see if small business rates relief will be applied for the 2016/17 rate year.

Some not so good news:
Although all ratepayers will benefit from the change in annual indexation from RPI to the lower CPI index, there will be a delay in the benefit as unfortunately this will not be introduced until April 2020.
As business rates income is fiscally neutral, properties valued at over £51,000 RV will take the brunt of the relief provided to small properties.

The Devolution Revolution:
The modernisation of the administration of business rates is gathering momentum with the announcement that rates bills will be transformed and standardised with an online payment option from 2017. Hopefully business rates bills will become more transparent and understandable.

Rates retention moves on with 100% pilot schemes announced in the Greater Manchester, Liverpool City Region and the Greater London Authority areas with a move towards 100% rates retention in the future.

Councils will have powers to cut business rates to aid growth but I have to question if this power will be used by hard pressed local authorities. However, discretionary powers to provide rates relief to support public lavatories may be popular with local authorities.

Elected Mayors will also have the power to levy a business rates premium to fund local infrastructure projects. What is not clear is will the greater London Authority be able to charge an additional levy whilst the Crossrail supplement is still in force?

News from Scotland:
The First Minister announced on the 18th March that the Scottish small business bonus scheme will be retained until 2021 at least.
The Scottish review of business rates is to be led by Ken Barclay the former chair of RBS Scotland with the main aims of being revenue neutral, supporting growth and simplifying the system.

The Enterprise briefing paper published in the UK Parliament Library on 26 January 2016 contains two issues relevant to the Non-Domestic Rating system in England.

To provide regulations to amend the Commissioners for Revenue and Customs Act 2005 to allow the VOA and Billing Authorities to share relevant information in respect of the Non-Domestic rating system. The information disclosed will be exempt from the Freedom of Information Act and not allowed to be disclosed to third parties unless for Court proceedings or under a Court order, or by consent of the person to whom the information relates.

To provide powers for the new Check, Challenge and Appeal system for the 2017 non-domestic rating valuation list by amending the Local Government Finance Act 1988 and introducing new regulations.

The new regulations will require:

  • Timescales and circumstances for the steps in the Check, Challenge and Appeal stages.
  • The grounds of appeal.
  • What matters the Valuation Tribunal for England cannot take into account.
  • Restrict the submission of new evidence.
  • Introduce a Civil Penalty (up to £500) for providing false information.
  • Introduce fees for appeals (£100 – £300), refundable if successful.

The second reading of the Enterprise Bill is due on 2 February 2016 and the new regulations should be in force in time for the 2017 Revaluation on 1 April 2017.

Following the aftermath of Storm Desmond in Cumbria and Lancashire, news reports say that around 5,000 households and businesses severely affected by flooding will receive temporary relief from their Council Tax and Business Rates. The tax waiver was agreed at the Government Cobra emergency Committee meeting. For more on this Click Here

Goodman Nash is recognised as one of the first audit business rates recovery specialists and can help businesses get temporary relief from business rates and look into other business rates mitigation opportunities. Contact Goodman Nash to see what our specialists can do for your business.

In October 2015, DCLG announced consultation on the new proposed rating appeal system in England – Check, Challenge, Appeal. The consultation ends on 4 January 2016 and the new system will be in place for the 2017 Revaluation.

In 2015 the Government introduced new business rating regulations in England (SI 2015/424) and set deadlines to restrict the effective date for 2010 rating list alterations to 1 April 2015 or the date of the event, if later, unless there was an outstanding appeal made before 31 March 2015.

The first deadline resulted in over 200,000 new appeals being submitted by ratepayers and their representatives in the period up to the 31 March 2015 deadline. The effective date for any list alteration pursuant of a new proposal served on the VO after 31 March 2015 is now restricted to 1 April 2015, or later.

The second deadline, 31 March 2016, is rapidly approaching. After 31 March 2016, the Valuation Officer will be restricted to an effective date of 1 April 2015, or after, for any 2010 list alteration, other than pursuant to existing appeals served on the VO before 31 March 2015.

What does this mean in practice for ratepayers?

From 1 April 2016 the VO will also be restricted to an effective date of 1 April 2015, or later, for any 2010 list alteration, other than as a result of appeals made before 31 March 2015. By missing the 31 March 2016 deadline, ratepayers, with no outstanding appeals made before 31 March 2015, will have no recourse to reduce the rateable value of their property and obtain the rates refunds for overpaid business rates back to 1 April 2010. On the other hand the Valuation Office will be restricted to an effective date of 1 April 2015 for any list alterations made after 31 March 2016 in respect of new properties, any alterations to existing properties or for any material changes in circumstances that occurred before 1 April 2015.

What does this mean in practice for ratepayers?

From 1 April 2016 the VO will also be restricted to an effective date of 1 April 2015, or later, for any 2010 list alteration, other than as a result of appeals made before 31 March 2015. By missing the 31 March 2016 deadline, ratepayers, with no outstanding appeals made before 31 March 2015, will have no recourse to reduce the rateable value of their property and obtain the rates refunds for overpaid business rates back to 1 April 2010. On the other hand the Valuation Office will be restricted to an effective date of 1 April 2015 for any list alterations made after 31 March 2016 in respect of new properties, any alterations to existing properties or for any material changes in circumstances that occurred before 1 April 2015.Goodman Nash is well placed to help clients obtain the savings due by persuading the VO to make relevant list alterations that generate refunds back to 1 April 2010. However, the clock is ticking and this opportunity will not be available after 31 March 2016. Time is of the essence.

In October 2015, DCLG announced consultation on the new proposed rating appeal system in England – Check, Challenge, Appeal. The consultation ends on 4 January 2016 and the new system will be in place for the 2017 Revaluation.

It is claimed the aim is to improve transparency in the appeals system, to improve efficiency and decrease the time taken to resolve appeals. Will the proposed Check, Challenge and Appeal system do that?

The check stage to agree the facts is a sensible first step. Goodman Nash has been doing this for years under the current rating appeal system, in providing their rates audit service to clients.

However, the Challenge stage is definitely one sided and far from transparent. The publication by the VOA of clearer and simpler information behind the valuation process is not sufficient; the ratepayer needs visibility of all the evidence and the VOA’s analysis of the data up front. Conversely, the ratepayer is expected to put all their cards on the table without visibility of the VOA’s evidence. This cannot be right. Only disclosing the VOA’s evidence when the VOA issues a decision notice on the challenge is far too late in the process. The VOA currently hides behind the Commissioners for Revenues and Customs Act 2005 on disclosure of evidence. The publication of the VOA’s evidence would require further legislation to allow them to do this, but this would enable the system to become truly transparent.

The appeal stage will be the first time a case will be transmitted to the Valuation Tribunal for England (VTE) and it is proposed a fee of £100 – £300 will be applied, refundable if successful. This is also a sensible stage, freeing up the VTE from mountains of unnecessary administration of appeals that end up agreed or withdrawn.

The VTE will sensibly only deal with genuine cases required to be decided by a tribunal. However, the sting in the tail comes in the condition that the VTE will only consider if the VOA’s decision notice is correct or incorrect, based on the evidence and reasons exchanged at the Challenge stage and the proposal to make the VTE the final arbiter on facts. The proposal to allow appeals to the Upper Tribunal (Lands Chamber) only on points of law would be a retrograde step in my opinion.

There is also a proposal to allow relevant billing authorities to be party to the process. Will this result in tri-partite discussions making agreements even more difficult and protracted?

The proposed new rating appeal system is in danger of becoming a one way mirror in favour of the VOA rather than a transparent window to a fairer appeals system.

On 28 October 2015 the Local Government Chronicle (LGC) reports that RV loss on a successful appeal by Virgin Media has resulted in the dissolution of the Gloucestershire County business rates pool. LGC reports that Tewkesbury Borough Council was forced to leave the Gloucestershire pool over a £3.95 million safety net payment.

Virgin Media was initially assessed on the Tewkesbury 2010 rating list for their National backbone fibre optic network at £7.25 million. The RV was based on the number of lit fibres plus the rental value of network buildings. The assessment was reviewed and reduced down to £5.7 million RV by the VO in September 2014. Following the successful settlement of an appeal in May 2015, the RV was further reduced to £3.9 million, effective from 1 April 2010.

The large reduction in RV is predominantly a result of the rapid growth in the capacity of the equipment that lights the optical fibres, reducing the demand for lighting multiple fibre strands on long distance routes and the consequential reduction in space required to house modern telecommunications equipment.

In 2014 the Valuation Tribunal for England (VTE) heard an appeal on “the Modern Industry Standard” in respect of the Cable & Wireless National backbone fibre optic network in England (2005 Central List assessment) deciding that a modern industry standard network required less lit fibres and smaller equipment areas. In essence this was a technical obsolescence case. The VTE decision was not appealed to the Upper Tribunal (Lands Chamber) by either party and is now being applied to 2005 and 2010 backbone fibre network assessments.

It is interesting to note that VM have outstanding 2010 list appeals to merge all the Cable TV (CATV) access networks (circa 67 assessments in different Billing Authority areas) with the VM backbone network back to 1 April 2010. If successful, all the VM network assessments would merge to create one assessment (circa £100m) in one Billing Authority list and all the separate CATV assessment would be deleted back to 1/4/2010.

The Tewkesbury case may only be the tip of the iceberg. Numerous Billing Authorities’ rates retention schemes are steaming towards troubled waters ahead.


Scotland’s deputy first minister, John Swinney, announced at the SNP conference last week that from 31 October 2015, Scottish local authorities will be able to cut business rates to boost economic activity in particular geographic areas.

The power to cut business rates comes from the Community Empowerment (Scotland) Act 2015, which also contains powers for Scottish local authorities to retain all business rates they collect.

The power to move the control of business rates from central to local government has largely been welcomed in Scotland.

Please click here for the media article.

Goodman Nash’s database, IT system and professional experience is well placed to identify opportunities for ratepayers to make savings in business rates.

George Osborne at the Conservative Party conference dramatically announced that Councils will be able to keep £26 billion in business rates by 2020 and set their own rates poundage. Is this a brave new world or a step back to the bad old pre 1990 days?

Before the Local Government Finance Act 1988 introduced the Uniform Business Rate (UBR) and transitional phasing from 1990, business rates were set locally by Councils (Billing Authorities).

Alan Bradford, GN’s Technical Director, believes the UBR introduced certainty and some transparency on business rates bills that in general has been accepted. I remember the bad old days when shops on opposite sides of the street in different Billing Authority areas paid similar rents but vastly different business rates, depending on the political colour of the Council. How will cross boundary and Central list properties be treated? Has the State Aid implications of this change been considered?

GN has a wealth of expertise in Auditing business rates bills which may become even more complicated for large national chains with properties in numerous Billing Authority areas. GN is well placed to meet the challenges with specialist in house IT development.

Click here for the news article.

BSc, MRICS Board Director
6 October 2015

The rating appeal pendulum has swung again. Hot on the heels of the Monk Court of Appeal decision, tightening the repair assumptions earlier this year, comes the Cerep Lands Chamber decision on what a reasonable landlord would consider to be economic to repair. The RV of a two storey retail unit in Tunbridge Wells was reduced from £57,500 to £0 effective from 1 April 2010 on the basis the hypothetical landlord would not find the cost of repairs economical to undertake. The agreed cost of the repairs required was only twice the RV in the list. The hypothetic landlord would get little from investing in repair as they would want a profit on the expenditure, not just to break even. The risk at the material day that the redevelopment might be brought forward was also taken into consideration.

The stricter repairing assumptions formulated by the Monk Court of Appeal decision are also subject to a challenge to the Supreme Court. The repair issue is far from resolved.

For more on the case, click here.

The Government in England (DCLG) announced in September a consultation on the decapitalisation rate used in the “Contractor’s Basis” of valuation for non-domestic rates in respect of the 2017 business rates revaluation in England. DCLG have requested responses by 9 November for the Decap rate in England. See detail at

A similar consultation was announced by the Scottish Government in August with responses requested by 23 November and by Welsh Assembly Government with responses required by 25 September.

We are pleased to announce the recent passes achieved by Alan, Alex and Chris, in the rating section of the IRRV (Institute of Revenues Rating and Valuation) Level 3 Certificate for Business Rates. Chris also “bagged” success in the valuation and rating law section.

This is testament to the hard work put in by the team which included additional internal tuition from our Technical Director alongside external tuition from the Course Leader Gary Watson, Deputy Chief Executive Officer of the IRRV. Gary extended his congratulations to the team.

New graduate entrants from our audit team will be embarking on the same course shortly, reflecting our determination to invest in our people in order to continue to deliver our first class services to our customers.

Further exams will be taken by the team in December of 2015 with graduation expected in 2016.

Alan Weston BSc, MRICSBoard Director
3 September 2015

The long awaited Supreme Court decision on the unit of assessment for non-domestic rating valuation, heard on 11 February 2015, was finally handed down on 29 July 2015.

The Supreme Court unanimously overturned the decision of the Court of Appeal, the Upper Tribunal (Lands Chamber) and the VTE in holding that the 2nd and 6th floors of an office block in Tower Hamlets, occupied by Mazars, formed two seperate assessments (hereditaments) not one. This was not unsurprising.

However, the Supreme Court went further. They have squashed at a stroke the practice based on the now overturned Gilbert v Hickinbottom [1956] Court of Appeal decision, adopted by both the VOA and rating practitioners of assessing adjascent floors connected through common parts as one hereditament. There will no doubt be other unforeseen circumstances that will come to light when the decision is fully applied. Had Mazars occupied the 2nd and 3rd floors, the decision would have been the same, two hereditaments.

Lord Sumpton formulated three principles on units of assesment.
1, Geographical – visual or cartographical unity – not simply a question of contiguity.
2, Functional – is the use of one property necessary to the use of the other property? – test: could they reasonably be let seperately?
3, Use – Is the use of one section necessary to the effectual enjoyment of the other? – This does not depend on the business needs of the ratepayer but on objectively ascertainable characters of the premises. A factual judgement with a large measure of professional common sense.

The Supreme Court decision makes it absolutely clear that the primary test is the geographic test, the functional test is surbordinate. Principle 2 and 3 were envisaged to apply only to a limited category of cases.

Impact of the Mazars Supreme Court decision:

Although disappointing for ratepayers expecting the merger of assessments and the possibility of size allowance, the real sting in the tail is the treatment of consecutive floors. Consecutive floors will now have to be seperately assessed to rates, even if they are occupied by the same ratepayer, unless they have exclusive internal connections such as staircases or lifts. Contiguity by common parts is no longer a relevant consideration. This may lead to the removal of size based allowances and the split of multi floor assesments into seperate floor assessments, which will increase liabilities.

What impact does this have on car parking spaces, adjascent buildings occupied together but only connected by common parts? Time will tell.

In the time of preparation for the 2017 Revaluation, where will the resource come from in the VOA to review all the current multi-floor assessments and split them?

Will the Government legislate to allow the VOA to maintain the rules, as they thought they were before Mazars, as did in the Anston repairs decision? I for one would not be surprised.

The Supreme Court has lit the blue touch paper, will the Governemnt extinguish it with a bucket of water or do we step back and watch the fireworks?

The recent budget has highlighted that a major overhaul of the appeal process is needed. Whilst Goodman Nash can’t influence such changes, we can still assist in reducing your expenditure. The proposed “Check, Challenge, Appeal” process will not effect how Goodman Nash deliver results. Our work rarely involves an appeal, securing £20-£25m per year for our clients. Beyond the recent appeal deadline and restrictions to amend previous rating lists, we continue to be able to help. Contact Goodman Nash to find out how we can save you money on your Business Rates.

Goodman Nash recently received further recognition for excellence in May 2015, where we were highly commended as an Outstanding Business by Grads for Growth. The Grads for Growth panel were impressed by the manner in which Goodman Nash invests in graduates joining the company.

Grads for Growth is an EU-funded development project which enabled SMEs located in the South West of England to employ graduates in order to further develop businesses.

The day was an excellent showcase of leading SMEs in the South West, with businesses in every sector from sales to skincare and recognised many of the best SMEs in the region for graduates to be a part of. It also featured an excellent talk from innovator Stef Lewandowski.

At Goodman Nash, we pride ourselves on giving our graduates meaningful work from day one and training them on live projects. Many of our graduates have been offered excellent career progression within the company. We are proud to have this recognition of our and our graduates’ hard work and are pleased that they could represent Goodman Nash at the event, recognising Goodman Nash’s excellent culture in growth and impressive achievements within the company.

Interested in becoming a part of Goodman Nash? send your CV to Jason Delaney.