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Tax dispute appeals soar as retailers challenge property values

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The economic impact of COVID-19 has led to a surge in tax appeals in England with 2,230 non-domestic premises every working day challenging their property valuations which form the basis of business rates bills, a Government agency has today confirmed.

Data released from The Valuation Office Agency, an executive agency of HM Revenue & Customs, show a total of 144,910 shops, pubs, restaurants, offices, factories as well as public sector buildings, lodged a check to their property tax valuation during the first 3 months of the 2020/21 financial year.

The number of checks lodged was up 690% on the corresponding period in 2019/20, with 18,340 checks raised between 1 April to 30 June 2019.

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A check is the first stage of a formal appeal under a three stage process called ‘Check Challenge Appeal’. Alex Probyn, UK president of the real estate adviser Altus Group, said: “The impacts of COVID-19 on property are already obvious arising from the national restrictive measures introduced to counter the pandemic and grounds exist to support a substantial and prolonged reduction.”

The Government has delayed the next revaluation of business rates in England until 2023 so that property valuations can be calculated by reference to emerging post coronavirus rents that are being paid on 1 April 2021. Experts say successful appeals citing the pandemic are likely to offset that delay.

Probyn stressed that time was of the essence to help those within sectors of the economy not in receipt of the business rates holiday likes offices, factories and warehouses, adding, “The effects of the pandemic within the tax base must now be reflected quickly as the changes are so fundamental, uniform and wide ranging.” The Chancellor, Rishi Sunak, has vowed to do “whatever it takes” to support business.

The Treasury have written off business rates bills this financial year to the tune of £10.22 billion for all occupied retail, leisure and hospitality properties although councils in England still expect to collect £15.4 billion in rates according to Altus Group analysis.  

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Sam Lewis

The author Sam Lewis

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