Between Christmas and New Year, Sajid Javid, the Communities Secretary, published draft legislation to reverse the controversial tax.
Following the Mazar Supreme Court ruling in 2015, businesses were facing a seemingly unfair and inflexible system. The so-called staircase tax got its name because it appeared to punish businesses housed in the same building or unit, across separate but touching floors or where separated by a wall only. Organisations in such a position often found themselves with a disproportionately high bill, and no access to rate relief in some cases.
Under the new proposed legislation however, significant and unexpected bills, sometimes as far back as April 2010, are expected to be reversed, and organisations will be able to have their rateable values recalculated under a new system. In an additional blow to the government, there has also been criticism from senior judges about the number of rating appeals that have been thrown out by the Valuation Office. Almost a quarter have been struck out on what is considered a minor technicality – something which seems to be disproportionately prevalent with smaller businesses in particular.
The Mazar ruling was always going to require an adjustment. Cumulative values being applied to the same property always looked like an unfair approach; almost double counting and hitting the smallest the hardest.
The intention is to re-open the appeals system in these limited Mazar situations to ensure ratepayers do not lose out as a result of alterations by the Valuation Office dating back to 2010.
Once this Bill receives Royal Assent and appropriate secondary legislation is granted, ratepayers will be able to approach the Valuation Office to have the new provisions applied. This will be via a right to make a proposal to amend the 2010 Rating List. The intention is that the decision will sit with the ratepayer to decide if they wish to have a backdated change to the 2010 list.
In respect of the 2017 rating list the Valuation Office has a duty to maintain the rating list and this will be ‘business as usual’ once the previous practice is reinstated by Royal Assent and is no longer within the consultation. Ratepayers who believe the reinstated practice should apply to them on the 2017 rating list will need to submit a ‘check’ and the Valuation Office will prioritise these cases.
What will be interesting to see now is to what extent this reversal changes things. We’re hoping our future rating appeals on behalf of clients will form part of a fairer process than has been the case in some previous situations.
Get in touch with us today to discuss cost reduction strategies
Article by: Paul Giness