SMEs could be unfairly penalised by proposed changes to business rates

Government plans to prevent businesses from appealing incorrect business rates calculations have been dubbed ‘wildly unfair’ for small and medium-sized enterprises (SMEs) by a number of trade bodies.

The proposed regime, known as ‘Check, Challenge, Appeal’ is to contain a ‘reasonable professional judgement’ provision which will effectively disallow ratepayers from contesting an incorrect bill. This provision will apply in all cases where the margin of error is within 15 per cent.

But eight trade bodies, including the Federation of Small Businesses (FSB) have condemned the intended reforms on the basis that hundreds of thousands of SMEs could be hit with ‘wildly unfair’ taxes under this provision.

FSB policy director Martin McTague warned that struggling firms on the brink of insolvency would be “particularly at risk”.

He said: “[At first] we welcomed the Government’s ambition to make the business rates appeals system fairer and easier to navigate. However, it is hard to see how this proposal helps to achieve that aim.

“We believe this clause simply fails the fairness test and could result in the door being shut on small businesses who want to correct inaccuracies in valuations and reduce their rates bills”.

Jerry Schurder, head of business rates at property consultancy Gerald Eve, said: “These wildly unfair proposals represent the Government’s intention to grant itself the equivalent of papal infallibility and legislate away its errors, making hard-pressed businesses pay for the VOA’s mistakes”.