Discussions between the government’s Valuation Office Agency (VOA) and the Rating Surveyors Agency’s (RSA) Covid-19 strategy group on business rates appeals have been halted.
There’s no indication that the talks will resume, with the VOA stating that it was unable to take part in further discussions for the foreseeable future.
Many workspaces, such as offices, have been paying business rates throughout the pandemic despite the spaces widely going unused.
Businesses in the retail, leisure and hospitality sectors have had a business rates holiday to help them through the year’s lockdowns.
The Scottish government has announced that its business rates relief will be extended for the 2021/22 tax year. It applies to the following businesses:
Removal of relief for independent schools has also been deferred until April 1 2022.
With a large proportion of staff working from home, some firms have lost profitability. To try and recover some of the costs, the number of businesses appealing business rates on the grounds of material change of circumstances is higher than ever.
According to Colliers, hundreds of thousands of businesses are still waiting on the outcome of their Covid-19-related business rates appeals.
Figures from Check Challenge Appeal show that there were 289,510 checks (this is the first stage of the appeals process) between March and December 2020, with 70 per cent referring to material change of circumstances. What’s more, the number of appeals has rocketed further since the start of 2021, estimating that the outstanding number of outstanding Covid-19 checks is sitting at 350,000. The RSA represents over 85 per cent of rate payers who have outstanding material change to circumstances business rates appeals.
Although the talks between the VOA and the RSA were said to be going well last autumn, a premature press release sent to the media by one firm of agents in December derailed the discussions between the VOA and representatives of SMEs at Christmas time.
In these talks, the VOA had tabled up an initial offer of 25 per cent reduction in business rates which should have risen to 75 per cent. However, the offer was withdrawn when the news was brought to light and, unfortunately, before the offer could be properly accepted.
“For the VOA to be instructed that it should not resume negotiations or to engage with us [the RSA] in a constructive manner, could sound the death bell for many firms that have been hanging on in the hope for a reprieve on their business rates,” said John Webber, head of the business rates team at Colliers, who himself is part of the RSA.
“One wonders about the chancellor’s hand in this. Is he just hanging on so he can play Father Christmas at the Budget on March 3 – to bask in the glory of handing back to businesses monies they should not have paid out in the first place?
“We urge the chancellor to direct the VOA to re-enter negotiations with us, or to come clean and explain why it won’t. Our clients deserve more consideration than to be left out to dry for an extra three months in this way.”