Pubs waiting on tax rebates worth £750m
HM Revenue & Customs’ Valuation Office Agency (VOA) said it has resolved just 2,830 ‘Challenges’ between 1 April and 30 June 2022 with that figure plummeting 28% from the 3,950 that they settled during the previous quarter but also admitted 4,240 new cases were received as numbers continue to rise and the situation deteriorates.
Under a three-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 rates bills which are then paid to councils.
Most rebate challenges agreed
More than half of all Challenges are, ultimately, agreed leading to rebates going back many years often back to the 2017-18 financial year, according to real estate adviser Altus Group.
Despite business rates being revalued next year and firms receiving new property assessments later this year, almost 12,000 Challenge cases still await determination by the VOA with Altus Group estimating their resolution is likely to lead to tax rebates of about £750m.
Altus Group UK president Robert Hayton said the chancellor must intervene immediately by setting stringent targets for clearance by the end of the year.
Vital cash boosts denied
He added: “There is a cost-of-doing-business crisis, insolvencies are on the rise, yet firms are being denied a vital cash injection as their rates Challenges are kicked down the road.”
According to The Insolvency Service, between 1 April and 30 June 2022, there were 5,629 registered company insolvencies. The number of company insolvencies in the second quarter of 2022 was 13% higher than in the first quarter and 81% higher than in the same quarter in 2021.
The Bank of England has also warned the UK will enter recession and the longest downturn since 2008 with the economy forecast to shrink in the last three months of this year and keep shrinking until the end of 2023.
