New research from leading property advisers CBRE, estimates that up to 114,500 appeals for overpaid business rates are set to miss the 31 March deadline, costing businesses in England and Wales £221m+ in overpaid tax.
In the Autumn Statement 2014, George Osborne introduced a change* to business rate appeals, limiting those lodged after the 31 March 2015 deadline to rates paid from 1 April 2015, thereby significantly shortening the period businesses have to claim back for overpaid tax.
With close to one in five appeals made in the six months leading up to the deadline for the previous (2005) rating list, CBRE forecasts that the 670,000 appeals made against the most recent (2010) list will climb to over 820,000 in the coming fortnight.
Taking the total number of valid appeals lodged against the 2005 list as a guide, CBRE estimates 114,500 appeals will not be filed in time for this year’s deadline. Going on the most recently reported appeal success rate**, this will see at least 32,000 businesses missing out on a tax reduction.
Rohan Short, Head of Rating at CBRE Bristol, commented: “We always expect to see a spike in appeals in the run up to the deadline, but unfortunately there are still thousands of companies who will miss out on what could be a significant reduction in their business rate bill.
“With so many SMEs still finding their feet following the financial crisis, a successful rate appeal could have a material impact on a company’s ability to survive if not succeed in today’s competitive marketplace. I would urge those that haven’t already looked at their rateable value to do so right away. The deadline on the 31 March is for appeal applications, not the completion of a Valuation Office alteration, so there is still time to review and protect your position.”
Successful appeals typically need to provide evidence that the Valuation Office’s estimated rental value (ERV) for the property, calculated as at 1 April 2008, is wrong. Other factors leading to a reduction in rateable value stem from a material change in circumstances at the property, such as disruptive road or building works, or a new shopping centre in the area, causing a reduction in footfall for existing retailers.
Pictured above: Rohan Short, Head of Rating at CBRE Bristol