by Janice McKenzie
The Government’s latest move in its attempt to reform the rating system – the publication of a consultation yellow paper with a limited circulation – has been causing consternation in the property market this week. And most of the concern seems to surround the loss of ratepayers’ rights to appeal against their assessments.
At the moment, any ratepayer who has had a fall in rental valuation since the last rates’ revaluation can appeal for a reduction in his payment. Under the new proposals, he will only be allowed to appeal in the six months following revaluation if there is an “error of fact” in the valuation list.
The strongest reaction against this has come from Hector Wilks, Chairman of Council at the Land Institute, who said: “They are seeking to take away the rights in England and Wales which we have had for many years. Just because they have never had these rights in Scotland [the Government’s new proposals bring England and Wales roughly in line with Scotland] is irrelevant. We regard them as part of our tradition and we are, to say the least, unhappy that they are being taken away.”
Christopher Hedley, head of research at Herring Son & Daw, is asking for a right of appeal period of three years as opposed to the Government’s six months. He commented: “The Inland Revenue will not be spending all their time on revaluation, as has been claimed, but only the two years before a revaluation date. So a three-year appeal period is sensible.
“We see it as the withdrawal of the right to appeal which does stem from the restrictions in Scotland. There should be the right of appeal for a new owner or occupier of a building.”
Sinclair Goldsmith Rating Services’ Richard Halstead thinks that the loss of appeal rights would be partly alleviated if there were definitely to be a revaluation every five years. He said: “Losing the right to appeal is losing quite a lot of right really – the Government says, though, that there are too many appeals lodged and then withdrawn. It could be OK as long as revaluation did take place every five years.”
Another area of concern in the property profession was the short amount of time given to recipients of the yellow paper to respond to it. Mr Wilks found the suggested time “unacceptable”, while Adrian Britton of the ISVA declared: “We would hope that the time we have been given to consider the yellow paper is not a symptom of the haste with which a White Paper might be dealt with.”
The biggest thorn in the British Property Federation’s side is the possibility that owners could become liable for rates if the occupier does not pay up. There is currently a £200 celing on owners’ liability for rates which, says Ron Denny, deputy director general of the BPF, “makes sense for small rented houses where the tenants change frequently”.
However, he finds such a proposal “totally unfair” when applied to commercial and industrial cases. “If a tenant goes bankrupt, why should the owner have to cough up for rates?” he demanded.
Most parties have welcomed the payment of interest on any overpaid rates returned as a result of a successful appeal against a revaluation assessment. Debenham Tewson & Chinnocks commented: “This would ease the ratepayers’ burden if the Government withdrew the system of withholding rates, although tax may be payable on this interest.”
