Government 'must tackle flaws in business rate appeal system or chaos may ensue'
A new system for appealing against a business rates rise risks descending into chaos unless the Government takes urgent action to iron out its faults, an industry body has warned.
Business rent and rates specialists CVS said a tax portal introduced ahead of the business rates revaluation may have "vital elements missing" which could prevent firms from lodging an appeal.
The concerns echo a broadside from cross-bench peer John Lytton who told the House of Lords earlier this month that the Check, Challenge, Appeal platform involved "the most torturous" registration and had been designed to "prevent appeals".
The business rates revaluation, which comes into force on Saturday, updates rateable values to take into account property prices over the last seven years.
CVS has been working with the Valuation Office Agency to help test the new portal.
Mark Rigby, CVS chief executive, said: "The new system is creating a bottleneck at the early stages of the appeals process which could deter businesses from bringing genuine appeals."
Chief Secretary to the Treasury David Gauke is looking to crack down on speculative business rates appeals which he claims are "clogging up the system".
There was an average of 4,500 appeals per week in the first three months after the current tax regime was introduced in 2010, according to CVS, which expects an even bigger influx following the revalutation.
Mr Rigby added: "I am deeply concerned that with the system to be launched this weekend it may have vital elements missing, which could undermine the Secretary of State's ambition to have appeals resolved quickly, efficiently and effectively.
"It is vital these issues are resolved before the weekend or chaos could ensue."
The Government has added 4.6% to rates to cover the cost of appeals, while the Chancellor has handed pubs a £1,000 discount on their business rates to help firms hit hardest hit by the revaluation.
However, the Earl of Lytton warned the Government that the new system was not ready to handle appeals.
Speaking in the House of Lords on March 14, he said: " HMRC is devising a system known as 'check, challenge, appeal' -CCA, if you like - which requires the most tortuous and demanding ratepayer registration that could possibly have been devised and, separately but in parallel, an equally tedious system for rating agents to register.
"The 'check' aspect is still at the beta testing stage with, I understand, lots of anomalies and glitches to be sorted out, while 'challenge' and 'appeal' have yet to run at all.
"In my opinion it is clearly designed to prevent appeals generally by obstructing access to them."
The Press Association revealed earlier this month that political heavyweights George Osborne and Philip Hammond will both benefit from the business rates revaluation.
The current Chancellor's property firm - Castlemead - will receive a business rates cut of more than £12,000 over the next five years.
Meanwhile, Mr Osborne's family wallpaper firm is to enjoy a cut of more than £3,400 a year for its showroom in London's swanky King's Road.
Firms in London are set to be among those hit hardest due to soaring property values, with the Institute for Fiscal Studies (IFS) estimating businesses in the capital will see rates rise by around 11% above inflation over the next five years.
A Valuation Office Agency spokesman said: "These claims are misleading: we are not preventing anyone from appealing their business rates valuation.
"In fact, we're reforming the appeals process to make it easier and more transparent for businesses to check, challenge and appeal their rates, while at the same time our business rate reliefs mean thousands more businesses are seeing a reduction.
"From 1 April, 600,000 businesses will pay no rates at all."