As much of the business and professional world enjoys the August sunshine, Team GB success and a well earned rest, a significant surprise to the rating appeals process landed this week. The Department for Communities and Local Government (“DCLG”) issued its consultation paper –“Check, Challenge Appeal”, relating to reform of business rates. The consultation period runs from 16 August to 11 October.
In the depths of the consultation paper, a proposed change to the basis of appeal is suggested. The change, if enacted, would mean that a change to the rateable value may only be ordered by the Valuation Tribunal it believes that the valuation is outside the bounds of reasonable professional judgement. The paper suggests that the change is to recognise that valuation is a matter of professional judgment, and to free up the Tribunal to deal with cases where there is a real issue at stake. If, therefore, the valuation is considered to be too high, but not beyond bounds which might be contemplated, there is little chance of a successful appeal. What are the bounds of “reasonable professional judgement”: 5%, 10%? We do not know until this is put to the test in Court. But clearly this may deter many occupiers from appealing. For retailers and other corporates with many properties, there could be considerable additional expense. The tolerance would be assessed on a property-by property basis. A rateable value which is 5% high on a single property may not be a major issue, but if the same appears across a portfolio then the additional cost mounts.
Furthermore, some professional negligence cases have allowed surveyors up to a 15% “margin for error” in valuation cases. If a similar band of tolerance were allowed to District Valuers fixing rateable values, the rateable valuations could be up to 15% too high yet not challengeable.
With the changes to the valuation list already having been delayed to April 2017 , based on 2015 valuations, many will see this as a further frustration and, if adopted, may well prevent many genuine appeals.