Over 3,000 businesses in England have gone ‘bust’ while waiting for business rates rebates worth over £50m, new research has revealed.
A study by the real estate adviser Altus Group found that 3,165 business premises from offices, factories, shops, pubs and restaurants entered insolvency while they were awaiting the determination of their business rates challenge.
Under a 3-stage process ‘Check, Challenge, Appeal’ (CCA), introduced in 2017, the ‘Challenge’ stage is where businesses can make a formal challenge against their property valuation which is used to calculate bills which are then paid to councils.
Around 60% of all Challenges are ultimately agreed with Altus Group’s research suggesting that those businesses that entered insolvency after they had lodged a Challenge were denied a vital cash injection of £50.76m in rebates often going back five years.
The Valuation Office Agency, an executive agency of HM Revenue & Customs, are expected to resolve 90% of all Challenges within 12 months. According to Altus Group, however, they have failed to meet that target in every financial year since the introduction of CCA. During 2020/21, just 43% of cases were resolved in line with the target.
Robert Hayton, UK President of Altus Group, 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.’
The VOA promised in 2021/22 that they would clear 18,500 Challenges to try and reduce cases, but the research suggests just 15,710 Challenges were resolved, 15% less than the target.
Mr Hayton added: ‘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.’
