Give us our money back – firms demand rates refund

Exclusive: £2.1bn in fund reserved for appeals against business rates remains unspent

The Government has overcharged businesses around £2.1bn on their rates bill at a time when industry figures are demanding sweeping reforms of the tax regime.

Ministers allow officials at the Valuation Office Agency (VOA), which does valuations on all business premises across England, to take into account potential successful appeals by businesses over their rates bill. But the 3.6 per cent target of the total bill which is put aside for the appeals has not been reached, with only 1.4 per cent of the pot going to winning claimants in the past four years.

Experts estimate £2.1bn over five years is unaccounted for, assuming the number of appeals grows in line with previous years over the next 12 months.

Government rules state that the VOA must remain revenue neutral and cannot make a profit.

Business rates are charged on all business premises and are calculated via a complicated formula based on the value of each site. The VOA does revaluations every five years to keep values up to date.

Businesses have called on the Government to change the system and increase the frequency of valuations as well as make the system easier to understand.

Because the valuation takes place every five years, retailers in poorer regions have seen their rates bill become artificially high due to a fall in property values, while retailers in thriving areas such as Bond Street pay relatively lower rates because the increase in their value has not had an effect.

Campaigners and retailers, who pay the bulk of business rates, want the Government to review the system urgently.

The retail commentator  Paul Turner-Mitchell said: “At a time when there is so much discontent surrounding the amount businesses pay in rates, given the legislation, and the fact that the Government must not profit from a revaluation, the money must be handed back.”

Michael Weedon, deputy chief executive of the British Independent Retailers Association, said: “The whole business rates calculation is a monstrous complexity which stretches to 200 pages. The whole system is very opaque.

“One of the ways they can avoid arbitrary calculations like this is getting the valuation right in the first place. If they simplified the system that would reduce the number of appeals. Then they wouldn’t need to come up with these decisions on how much to allow for appeals.”

The Chancellor, George Osborne, has capped the annual rises in rates, which follow the Retail Price Index, at 2 per cent. But the current rateable period has been extended by two years to 2017.

Last week plans to tighten the appeals process were scrapped after industry protests. A detailed review of the rates system is due in three years.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
News
An iceberg in Ilulissat, Greenland; researchers have been studying the phenomena of the melting glaciers and their long-term ramifications for the rest of the world (Getty)
news
Environment
environment
Arts and Entertainment
Hugh Jackman bears his claws and loses the plot in X-Men movie 'The Wolverine'
film
Arts and Entertainment
'Knowledge is power': Angelina Jolie has written about her preventive surgery
film
News
Zayn has become the first member to leave One Direction. 'I have to do what feels right in my heart,' he said
peopleWe wince at anguish of fans, but his 1D departure shows the perils of fame in the social media age
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing