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Business Rate Appeals

Volume 796: debated on Monday 25 February 2019


Asked by

To ask Her Majesty’s Government what plans they have to carry out a review of the “check, challenge, appeal” system for business rate appeals.

My Lords, as set out in the 2017 response to the consultation on “check, challenge, appeal”, the Government intend to carry out a review of the effectiveness of the new system in 2019. We expect that this review will draw upon the Valuation Office Agency-led evaluation of the delivery of the new system, which is due to begin later this year.

Is my noble friend aware that this review is not before time, in that well over 10,000 appeals are bogged down in the agency at the moment? The challenge element does not work because the portal crashes; the check element does not work because it cannot be edited or amended. Against that background, is it not extraordinary that the agency allows all the retailers I am talking about, let alone other businesses, to incur huge costs in professional advice and have their cash flows adversely affected? Rather than having it at the end of 2019, I urge my noble friend to start the review on 1 March 2019.

My Lords, I thank my noble friend very much indeed; I know he has done much work on this area. The new system was set up in the spring of 2017 and we were always clear that there would be a review this year. Of the backlog, 100,000 were cleared last year and, as of September 2018—the latest date for which we have figures since the new system came in—there have been 50,000 checks and 6,500 challenges. However, I agree that there are challenges to address. My honourable friend the Minister in the other place meets regularly with Melissa Tatton, the chief executive, to discuss them.

My Lords, it is good that the noble Lord agreed that there are challenges to meet. The situation described by the noble Lord, Lord Naseby, is, frankly, appalling. Is there nothing that the Government can do in the meantime, or will we have to wait for this review to take place?

My Lords, as I indicated, we are having that review, as we committed to do, and we have regular meetings with the VOA, which operates independently of government, to discuss the many concerns that do exist. However, I think most fair-minded people would say that the system has improved. As I said, we have regular meetings to address those concerns and we will reflect on them when we conduct the review.

My Lords, when George Osborne delayed the business rate revaluation, he paved the way for major disruption when businesses had to adjust to seven years of relative price changes in 2017. Does the Minister agree that a simple way forward would be to tax businesses based on land values rather than property values? That way, there would be 60% fewer plots to assess and land values would be more predictable, allowing the VOA to make more regular revaluations.

My Lords, we are having more regular revaluations but I say to the noble Baroness—this is on a slightly different point from the question—that history is littered with examples of ill-thought-through property taxes and we must be very careful about going there. We need to take time on this.

My Lords, when any Government have a problem, they normally set up a review body with no set time for when it will give its findings. Can the Minister give a set date for this review so that we are not asking regularly for the latest position on it?

My Lords, I anticipate that questions will arise regularly, as they rightly should. We have always been clear that the review will happen in 2019, and I have reiterated that today. There is no doubt on the position: we want to let the new system operate fairly. As I said, it only started in the spring of 2017, it is making progress and we are having regular meetings to update. I think that is a fair position.

My Lords, while drawing the House’s attention to my professional interest in business rates matters, I put it to the Minister that the Government’s response indicated a review by, not during, 2019. Problems with “check, challenge, appeal” have been ongoing since the beta test stage two years ago and, despite the intervention of HMRC’s digital team in the summer of 2017, far too many glitches, impediments, shortcomings and so on persist. Given the continuing criticism of CCA’s functionality, will the Minister undertake as part of any review to have the system independently audited and the findings published?

My Lords, I pay tribute to the noble Earl, who has been very active in this area. Two hours ago, he sent me a list of issues he is concerned about, which I will ensure that officials address. In the process of reading it, I noted his acknowledgement that the system has improved. More work needs to be done, as I said, but we hold regular meetings to review progress and speak to chief executives and officials to ensure that it continues.

My Lords, no Question is complete without a contribution from the noble Lord. This is one of the many areas where we are making good progress—as we are on Brexit too.

My Lords, the Minister dismissed the idea of land value taxation. Is he aware that it operates in many countries entirely successfully, so it is not something that does not work?

My Lords, I did not dismiss it; I just added a note of caution, saying that we should not rush into these things. From memory, I think that was the position of the Liberal Democrats in the coalition years. These things have to be thought through.