Business rates appeals surge by 690% after coronavirus hits firms

Business rates appeals have surged by 690% over the past quarter as property owners claimed values were hammered in the face of the coronavirus pandemic, according to new figures.

Government data released by the Valuation Office Agency of HMRC revealed that 144,910 shops, pubs, restaurants, offices, factories and public sector buildings launched appeals in the three months to June.

It represented a surge in appeals over the tax, with only 18,340 checks reported over the same period last year.

Industry experts have said the increase was driven by concerns that property valuations are not accurate, after the lockdown caused a sharp fall in footfall for retail and hospitality firms.

However, firms will not have to pay business rates for the current financial year, after the Chancellor wiped the tax for all companies for the period as part of his economic support package.

Alex Probyn, UK president at real estate advisers Altus Group, said: “The impacts of Covid-19 on property are already obvious arising from the national restrictive measures introduced to counter the pandemic and grounds exist to support a substantial and prolonged reduction.

“The public purse is already under intense pressure but the Government can, through the existing appeals system, ensure support is delivered quickly and proportionately, delivering maximum benefits from the funds available.”

Last month, the Government delayed the next revaluation of business rates in England until 2023 so that property valuations can be calculated by reference to post-virus rents that will be paid on April 2021.

Mr Probyn said that successful appeals citing the pandemic are likely to offset that delay.

Many firms have appealed as they have claimed a Material Change of Circumstance (MCC) as a result of the impact of the virus, experts said.

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.

“Businesses are claiming MCC either as a result of the impact of the initial lockdown or on the impact to businesses as they have reopened.”