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It's time to consider challenging your business rates calculation, says RVA Surveyors

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Business rates or non-domestic rates are a variant of a 500-year-old tax, the current version of which was introduced in 1990 to fund local services based on property values, raising approximately �25 billion a year.

RVA Surveyors are business rates reduction specialists who have been giving guidance to businesses since 2008.

The company has recently grown to over 100 employees as increased awareness about challenging business rates, and the complicated system the government has in place for reducing business rates liability, have ramped up demand.

It offers a '�no-reduction, no-fee' service which has proved popular within the business community as a no-risk solution to reducing rates.

So who challenges business rates? It's a mix of commercial property owners and tenants who can benefit significantly, whether it's attracting tenants by reducing the business rates or even claiming back historic savings that have been identified.

How is it all calculated?

The rateable value is based on an open market estimate of the rental value of the property. This value is set by the Valuation Office Agency (VOA).

It is an executive agency of HMRC that values properties for the purpose of Council Tax and for non-domestic rates in England and Wales.

Business rates are determined by the VOA which multiplies the rateable value by the 'multiplier'� set by the government.

The rateable value, or property's value, is based on the open market value from 2015. There are two multipliers, the standard non-domestic and small business non-domestic rate multiplier.

The Government sets the multiplier each financial year which previously followed the retail price index (RPI) but now falls in line with the consumer price index (CPI). This is then charged by the local authority.

How much are business rates worth to the UK Government?

The Ministry of Housing, Communities & Local Government (MHCLG) estimates that during 2021-22 income collected in business rates will be �25.1 billion and that �4.7 billion will be granted in relief by local authorities.

The bad news is according to statistics provided by the VOA; just over 600,000 checks have been registered meaning that two-thirds of landlords/businesses have not reviewed their rates in full.

Is this a tax I can challenge?

Business rates can be contested by business owners or by appointed agents like RVA Surveyors.

The business rates appeal process is known as check challenge appeal and is dealt with by the VOA through the Government gateway online service (explained later in this article).

It is important that you keep paying your business rates while a contention is taking place to avoid facing any action by your local authority.

Business awareness around challenging rates is a huge problem as highlighted by the understanding of reliefs available to small businesses.

The Federation of Small businesses tax survey 2021 revealed that over a 1/3rd of small businesses interviewed were unaware of small business rates relief with less than half engaging with the reliefs system in the last two years.

Business rates are regularly blamed for the downfall of the British high-street as they are seen to give online retailers an unfair competitive advantage over traditional retailers.

Many UK businesses have no idea how to successfully challenge business rates and generally accept they are correct from the onset.

RVA Surveyors complete an onsite inspection of every property they work with to find any discrepancies in the information held by the VOA that would support a case to reduce the liability for the property, through the check challenge appeal process.

What is check challenge appeal?

The UK Government's business rates appeal process is known as check challenge appeal.

The new framework, which came into force from April 2017, is a three-stage appeal process. It was introduced as a response to widespread agreement that the previous system needed reform.

Under the old system, challenges were frequently made without any supporting evidence. This meant there was often very limited engagement between the VOA and the ratepayer (or their representative) until very late in the process.

As per the Governments website, the check stage will ensure that relevant facts are validated (by the ratepayer or an agent like RVA Surveyors) and agreed as far as possible. If necessary, the rating list will be corrected to reflect the facts. Where facts cannot be agreed, the differences will be clearly established.

The challenge stage allows the ratepayer or RVA Surveyors to challenge the rating list entry. They will set out their reason for the challenge, and put forward an alternative rating list entry (which will include an alternative valuation if that is the reason for the challenge), backed by supporting evidence.

If necessary, there will then be an opportunity for further discussion between the parties. The VOA will issue a decision on whether the rating list will be altered and the level of any revised valuation.

The appeal stage allows the ratepayer or an agent like RVA Surveyors to appeal to the independent Valuation tribunal for England. The tribunal will consider whether the VOA has made the correct decision in respect of the challenge, based on the evidence put forward and exchanged at the challenge stage.

If the tribunal disagrees with the VOA's decision, it may conclude that the ratepayer's proposed rating list entry is correct, or alternatively it may substitute its own.

What is the Government gateway?

All of this is initially and broadly undertaken using the Government gateway, a platform that was developed to register for online services provided by the UK Government. Examples you can use the platform for are obtaining a driving licence, HMRC self-assessments and challenging your business rates. 

The process is complicated to navigate but businesses can undertake the management of the process themselves using the Government gateway. Specialists like RVA Surveyors succeed because of their expert knowledge with the system and high success rates for their customers.

How can I work with RVA Surveyors?

The first step to working with RVA Surveyors is to appoint them as your agent, so they can assist you with the Government gateway. RVA Surveyors will then take you through setting up a Government gateway account, claiming the property or properties in question, the type of account you need, making sure all your details are correct and accepted by the portal.

These simple steps need to be done accurately so a dedicated savings specialist from RVA Surveyors will be assigned to you.

The surveyor will then visit your property to complete an on-site inspection; from there they will create detailed up to date floor plans of your business. This step can be crucial and a big differentiator of RVA Surveyors.

Following the inspection, the surveyor will then research for the relevant comparable evidence to build a case that would support a reduction in your business rates liability.

An evaluation of surrounding properties and area is also undertaken to understand the local market and any changes which could influence the calculation of the business's rateable liability.

Once all of this has been considered and analysed there potentially may be a new calculated value for the property providing further evidence in the reduction process. RVA Surveyors submit these details as your agent to the VOA as part of the '�check' process.

RVA Surveyors, if unsatisfied once a check is completed, can challenge any valuation related to the same property.

It must be within 4 months of the check decision or within 16 months of your check submission if the challenge is about a change in the surrounding area (roadworks are an example).

RVA Surveyors can also challenge the valuation as your agent if the VOA has not made a decision on your check after 12 months. A challenge is a legal process with strict rules and must show grounds, evidence, a statement, a proposed new rateable value and rent details if rented.

How does RVA Surveyors find a reason for making a challenge?

Some of the reasons for grounds of a challenge, as per the UK Government website can be that the valuation was wrong when the rating list was created, there's been a change to the property or surrounding area, a change made to the valuation by the VOA is wrong, the property should be split into more than one property or combined with others into a single property.

RVA Surveyors excel in case management. They can understand valuations of similar local and national properties, have expert knowledge on legal decisions and other documents you may need to support the reduction.

Documents like photographs of the land, property and local environment can be crucial to the decision process, along with supporting statements and evidence that clearly highlight or underpin the reasons for the incorrect rateable value. If any of this is missing then the VOA will come back saying the challenge is incomplete and if not corrected within a certain timescale can become invalid.

Just like employing an accountant or a solicitor for their specialist skills, RVA Surveyors exist because they achieve results and reduce business rates liability in a hassle-free manner. Understanding the complexity of the system is crucial and many years' experience in achieving rates reductions for clients is clearly a fundamental part of the process. 

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