Companies have lodged 183,860 appeals to reduce their business rates bills in the past six months, as the pandemic continues to impact offices, shops and restaurants.
This has meant more than 1,000 new appeals have been lodged per day in the past six months, according to Colliers International.
Queries are assessed by the government’s Valuation Office Agency, as part of the three-stage “Check Challenge Appeal” process.
Around 38,960 “checks” were registered in the three months ending September, according to the VOA.
When this is added to the 144,900 registered in the previous quarter, 183,860 “checks” have been submitted in the six months since lockdown began.
Colliers noted this was significantly above the 158,930 “checks” lodged with the VOA in the three years between April 2017 and March 2020.
The total number of “checks” from struggling companies now stands at 342,760.
More office, retail and leisure occupiers are claiming appeals as a result of a material change of circumstance caused by the Covid-19 crisis.
As such, many are arguing that the previous basis for assessing rateable values is no longer relevant. Since rental values have plummeted on the back of Covid-19, the view is that rateable values ought to mirror rental values and be adjusted downwards accordingly.
The government has granted small businesses in retail and leisure temporary rates relief until April. However, premises above a certain rateable value have largely missed out on this.
John Webber, head of business rates at Colliers International, said: “Covid-19 has led to the biggest material change of circumstance the country has seen in rating history and the system has been around for over 400 years.
“You could say we are on a wartime footing – and at the moment there is no end in sight.”
Webber said the surge in appeals has added further pressure to a system that was already overstretched before the pandemic.
He added that a radical new approach is needed to stave off pending business collapses, including a rates discount.
“We believe most of the MCC appeals will succeed,” said Webber.
“The trouble is the time lag between a business paying its rates bill now and receiving rebated funds back from the VOA on a successful appeal. This could take a year – and many businesses may simply not be around then.
“We therefore recommend the VOA gives a rates discount now and ‘cuts out the middleman’ – so that businesses pay fair bills they can afford and ultimately would be paying anyway once the appeal rebate is taken into account. This will be essential if businesses are to plan ahead and hopefully work through this crisis.”
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