Business Rates (Hansard, 18 October 2001)

§ Mr. Drew
To ask the Secretary of State for Transport, Local Government and the Regions if he will estimate the number of appeals his Department has received following its recent revaluation of the business rate. [8584]

§ Dr. Whitehead
The Valuation Office Agency (VOA), an executive agency of Inland Revenue, is responsible for compiling and maintaining the non-domestic rating lists. The most recent revaluation took place on 1 April 2000. At 30 September 2001, VOA had received a total of 798,000 appeals against the rateable values shown in the new rating lists on 1 April 2000.
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This figure includes 632,000 appeals made to challenge the initial valuations made by the VOA at the time of the revaluation on 1 April 2000, and 166,000 made on the grounds that the valuation has been affected by a change in circumstances that has occurred since that date.

§ Mr. Drew
To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on current procedures with regard to the appeals process for business rates with specific reference to the periods for any underpayment of rates. [8585]

§ Dr. Whitehead
Appeals against rateable values shown in the rating lists can be made at any time before a new rating list comes into force, by sending them to the local Valuation Officer of the Valuation Office Agency, an executive agency of Inland Revenue. The next revaluation is scheduled to come into force on 1 April 2005. Appeals are automatically sent to the independent Valuation Tribunal, if they are not settled by agreement between the ratepayer and the Valuation Officer.
Where an appeal is made, the ratepayer must continue to comply with the payment schedule as set out in the original demand notice from the local authority. Payments may only be altered following the settlement of an appeal and following the issue of a revised bill by the local authority, or with the formal agreement of the billing authority. Where an appeal leads to a reduction in the amount due to be paid, any previous overpayment is refunded to the ratepayer with interest.
In general, the effect of any appeal leading to a change in rateable value will be backdated either to the date that the change in value occurred, or the first day of the financial year in which the appeal was made, whichever is the later.
However, in the following cases, changes in rateable value arising from an appeal will take effect from either the date that the change in value occurred or the day that the rating list came into force, whichever is the later:

(i) deletion of properties from the rating list,

(ii) changes between domestic and non-domestic use,

(iii)splits and mergers of properties, and

(iv)alterations arising from decisions of valuation tribunals, the lands tribunal and the higher courts.

§ Mr. Drew
To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the operation of rates relief for businesses affected by foot and mouth, with specific reference to(a) the Valuation Office and (b) individual local authorities. [8586]

§ Dr. Whitehead
Local authorities have discretion to provide rate relief of up to 100 per cent, to any ratepayers suffering hardship for any reason, under Section 49 of the Local Government Finance Act 1988. Usually, 75 per cent, of the cost of any such relief is centrally funded, with local authorities funding the remaining 25 per cent., to reflect the benefit to the local community of granting the relief.
Under Special Grant Reports 80 and 86, approved by Parliament on 2 April and 17 July 2001, the Government increased to 95 per cent, their contribution towards the cost to English rural local authorities of granting this relief to small businesses suffering hardship as a result of the foot and mouth outbreak. Guidance on the general 1318W operation of these arrangements was provided to local authorities in appendix (ii) to Special Grant Report No. 80.
This increased level of funding applies in respect of properties with rateable values of up to £12,000 in 151 English rural local authorities, and up to £50,000 in 37 of these authorities that are located in the worst affected areas, for a period of nine months from 1 April 2001. The level of Government support also increases to 98 per cent, in total where the net cost to the authority would otherwise exceed 0.4 per cent, of the authority's net budget requirement for 2001–02.
Special Grant Report No. 86 requires local authorities to submit claims for the grant by 31 March 2002. Those claims will provide information on the amount given in relief. Meanwhile, information provided by the Local Government Association shows that 117 English local authorities have received over 6,500 applications for hardship rate relief related to the foot and mouth outbreak.
The Valuation Office Agency (VOA) is responsible for setting rateable values, but has no role in administering rate relief. Ratepayers who believe that the rateable value of their properties has been adversely affected by the foot and mouth outbreak can appeal to the VOA for a reduction in rateable value. Around 72,000 such appeals have now been received in England. The VOA is now giving priority to settling appeals from businesses that have been worst affected by the outbreak.
The Government also extended by three months to 30 June 2001 the deadline for all appeals relating to properties in the 151 rural authority areas. This allowed any changes to rateable values arising from foot and mouth related appeals made before that date to have effect from the date the outbreak affected the property, instead of being limited to 1 April 2001. It also allowed the effect of other appeals made in these areas up to 30 June 2001 to be backdated to 1 October 2000, or the date of any change to the property giving rise to the change in value, whichever is the later. The effect of appeals made on or after 1 July 2001 in these areas will be backdated to 1 April 2001, or the date of any change to the property giving rise to the change in value, whichever is the later.