Plans to restrict business rate tax rebates by £2.5billion shelved, says Secretary of State

Sajid Javid

The Rochdale born Secretary of State, Sajid Javid, has confirmed that the Government will not be proceeding with the the controversial plans to restrict business tax rebates.

Ministers have faced a growing revolt over the proposed shake up of the tax appeal system with 13 leading bodies claiming it could be illegal.

The business groups, including the British Retail Consortium, the Confederation of British Industry and the Federation of Small Businesses said it could be illegal under local government finance laws.

Under the plans that were being drawn up, the shake up would have prevented firms from receiving rebates against the incorrect bills they faced if they were within a 'margin of error', which CVS believes could have been in the region of 10%, and other experts forecasting even higher at 15%.

The Government has now clarified the scope a tribunal has to determine a business rates appeal introducing a new phraseology ‘reasonable valuation’. At appeal on the 2010 Rating List it isthe duty of the ratepayer to demonstrate why the Valuation Office Agency’s determination is not reasonable and therefore there is no change to the ability of the ratepayer to seek a reduction on the new 2017 Rating List say CVS and this was a view shared by the Secretary of State during the telephone discussions and subsequently confirmed by the Department of Communities and Local Government.

Mark Rigby, Chief Executive of CVS, Britain’s largest business rates advisory firm said: “I am absolutely delighted to confirm, following intense lobbying and my meeting with the Secretary of State last week the controversial 'professional judgment' test will not form part of the ‘Check. Challenge. Appeal.’ regulations.

"The Secretary of State was once again fully committed to ensuring all firms pay fair and accurate tax, without rebates being curtailed and he should be commended for taking on board the concerns of business."

CVS had said that the 'margin of error test' would have been unfair and manifestly unjust, with tax bills still having to be paid even if proved wrong. CVS projected that businesses could have been denied tax rebates, over the next five years, of about £2.5billion.