VOA fund sparks demand for business rate review

Retailers have called on the government to conduct an urgent review of its business rates system, after it was discovered that the Valuation Office Agency (VOA) has an appeal fund surplus of £2.1 billion.

The fund’s purpose is to help the VOA pay out to companies who mount a successful business rate appeal, but government rules forbid it from making a profit and decree that it must be revenue neutral.

However, its estimate that 3.6% of its revenue would need to be set aside for these appeals has proved incorrect, with just 1.4% needed for this purpose over the last four years.
Consequently, business owners are demanding that any tax payments that went into this excess fund are handed back, and want the government to clarify the system and reassess it more frequently.

Currently, business rates are looked at every five years, but business owners have pointed out that a fall in property prices across poorer regions has left retailers in these areas paying an unreasonably high amount of tax.

Deputy chief executive of the British Independent Retailers Association, Michael Weedon, branded the business rates system “monstrously complex” and “opaque”. He suggested that simplifying this process would result in fewer appeals, which in turn would remove the need for the VOA to make estimates such as the one at the centre of this controversy.
The next detailed review of the system is not due until 2017.

Managing your business rates with Fiducia

With so many business owners seemingly feeling that they are operating under a broken system, the need to manage your business rates is clear.

Fiducia can help you mitigate the amount of tax you pay, particularly if your business has a number of empty properties. Formulating an efficient and compliant business rates strategy could be vital for the survival of your venture, so speak to us today on 01625 599 200 for further information.