Too late for some: thousands of businesses fail awaiting business rates rebates
Retailers are among thousands of UK businesses that have been forced to close down while awaiting rebates for property taxes, according to new data.
A massive 3,165 business premises, including stores, offices, factories, pubs and restaurants, entered insolvency while they were awaiting the results of business rate challenges, research by real estate advisory firm Altus Group showed.
Of those failed businesses, challenges could have seen a collective cash injection of £50.76 million in rebates, amounts that could have helped some stay afloat.
Business rates (the property tax levied on firms across the UK) have been a huge burden, despite property valuations declining in recent years.
Currently, firms have a three-stage process – check, challenge, appeal – for complaints about payments. The challenge process allows firms to make a formal dispute regarding their property valuation (which is used to calculate the bills that are paid to councils).
Around 60% of all challenges are ultimately agreed, according to industry experts.
The Valuation Office Agency (VOA), an executive agency of HM Revenue & Customs, is expected to resolve 90% of all challenges within 12 months.
However, it has failed to meet that target in every financial year since the introduction of the check, challenge, appeal policy, with some even dating back five years.
During the 2020-21 financial year, only around 43% of cases were resolved in line with the target.
Robert Hayton, UK president of Altus, said: “Firms emerged from a global pandemic to face a cost-of-doing-business crisis yet there is no urgency to help aid cash flow by resolving these challenges quickly.
“Rather than kicking the can down the road to be determined by overstretched tribunals, resources need to be deployed now by the VOA to clear the backlog whilst it is still manageable.”
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