Home Office lost a seven-year battle to slash its property tax bill by £16m

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The Home Office waged a seven-year war to slash the property tax bill for its Westminster HQ by nearly £16 million in a dispute over its own government's rates system, it has emerged.

Amber Rudd's Home Office eventually lost its lengthy appeal against the level of property taxes it pays for the site at 2 Marsham Street in the City of Westminster earlier this year, the Press Association has learned.

In an embarrassing twist for the Government, the building has also housed the Department for Communities and Local Government (DCLG) - which is responsible for business rates policy - since 2014 in a bid to save costs.

Home Office
The Home Office has shared its Westminster HQ with the department responsible for business rates since 2014 (PA)

The Home Office first lodged its challenge against the £25 million rateable value slapped on the site in 2010, hoping to slash the value by almost a fifth to £19.1 million.

The appeal was dismissed at the end of March this year, Valuation Tribunal decision documents show.

If the Home Office had been successful, it would have been handed a £15.75 million rates rebate, according to calculations by business rent and rates specialists CVS.

The revelation will be especially awkward for the Government, given that Prime Minister Theresa May was in charge of the Home Office throughout most of the appeal battle, in her previous role as Home Secretary.

Liberal Democrat leader Sir Vince Cable said: "It should be an embarrassment to the Government that one of their departments has spent seven years disputing the validity of the rates system through this appeals process, and yet they are the reason we are still lumbered with it."

And in a move that flies in the face of the Government's move to end business rate appeals that claim valuations should be reduced to £1, the Tribunal decision documents show the Home Office used this tactic in its initial challenge.

It sought a reduction on the grounds that "the rateable value is incorrect, and bad in law and should be reduced to £1 with effect from April 1 2010", according to the Tribunal decision.

This comes after comments made as recently as Monday in the House of Lords by Parliamentary Under Secretary of State Lord Bourne of Aberystwyth, who said: "It clearly cannot be right that a significant number of appeals began with entirely spurious claims that the valuation of a property should be reduced to £1."

Mrs May's Government changed the law surrounding business rate appeals in May, introducing the controversial Check Challenge Appeal Regulations, which has come under fire for being too bureaucratic, while the online system has been beset with problems.

Mark Rigby, chief executive of CVS, said the Home Office revelation makes a mockery of the new appeal rules.

He said: "The Government's entire justification for the new regulations have been completely undone by the actions of one of its own departments, but was entirely misplaced in any event as ratepayers' simply sought to protect their position in law by not being bound to a proposal should new evidence come to light."

A Home Office spokesperson said: "The Home Office has lodged an appeal to the Upper Tribunal (Lands Chamber) further to the decision made in March by the Valuation Tribunal.

"Our estates management partner routinely reviews all rates and valuation issues on Home Office buildings across the estate as best commercial practice."