The Rating Surveyors’ Association (RSA) says its broadly welcomes the Government proposals to increase the frequency of business rate revaluations but has raised concerns the government’s current consultation rests too heavily on reducing the number of appeals.
In writing to members recently RSA President Josh Myerson said there were a number of key measures necessary if the rating system was to be made “fit for purpose”.
He stated: “Whilst more frequent revaluations, when taken as a measure in isolation, do not necessarily ensure that the actual tax being paid by each ratepayer better reflects their actual economic circumstances at any moment in time, they do ensure that the measure of tax distribution across disparate ratepayers does. In so doing, they help to support trust in the system by increasing the correlation between a ratepayer’s assessment and contemporary rental values and by ensuring that property assessments do not fall out of correlation with wider market change through the passage of time.”
However, whilst supporting the move towards more frequent revaluations in principle, he also acknowledged the challenges this would put on the Valuation Office Agency (VOA) as well as a number of the Government’s proposals suggested that would be detrimental to the overall rating system. Any changes he argued had to be proportionate and the Treasury should try to be more ambitious with its reforms.
“We consider increased frequency to be an important step in improving the system from the key stakeholder; the ratepayer. We recognise that more frequent revaluations will likely bring a greater administrative burden on the VOA and that changes may be required in order to support the delivery of more frequent revaluations.
“We do not consider the package of proposed measures set out in the consultation represent a fair and balanced trade-off for ratepayers between new benefits and new requirements. Indeed, we would go as far as to suggest that a number of the changes would damage the rating system to such an extent as to effectively nullify the benefit derived from greater frequency.”
More frequent revaluations increase the VOA’s administrative burden in three principal ways:
1. A need to carry out the revaluation exercise on a more frequent basis and, with it, a need to divert
resources away from List maintenance and Appeal activity onto Revaluation activity.
- An expectation that more frequent revaluations will increase the volume of List maintenance activity.
- An expectation that more frequent revaluations will increase the volume of appeal activity
These can be addressed broadly by:
- Simplify and streamline the initial Revaluation process
2. Simplify and streamline the ongoing unilateral List maintenance process
3. Reduce appeal volumes
Myserson added that: “We do not believe that the package of measures as currently proposed achieves balance. The current package focusses too strongly on brazenly reducing appeal volumes regardless of the correctness of the assessment rather than trying to make the system more equitable in the first place by getting the assessment right.
“One must acknowledge that appeals are a wholly necessary feature of a well-functioning tax system. We are unable to support any suggested measure that seeks to throttle legitimate appeal rights. Instead, measures should focus on discouraging speculative or unnecessary appeals without placing unnecessary restrictions on ratepayers in their efforts to pursue legitimate appeals.
“The package relies far too heavily on the forced reduction of appeal volumes (through restriction of rights, restriction of appellants, the introduction of administrative hurdles and fees). Treasury must focus on ways to increase the accuracy of the List and ratepayers’ confidence in that accuracy rather than relying on measures that simply restrict appeals.”