Companies face losing a slice of £1.72bn if they don't appeal their business rates within the next two months.

January 29, 2015

Companies are at risk of missing out on five years' worth of refunds on their business rates if they don't appeal ahead of a looming deadline.

Business owners must register a ratings appeal before March 31, 2015, if they are to benefit from rebates potentially backdated to April 1, 2010.

No action has been taken on 206,000 affected commercial properties across England and Wales, according to CVS. This is equivalent to 47 per cent of eligible properties with a rateable value over £20,000. It means that more than £1.72bn of refunds is at risk of lying unclaimed.

At 81 per cent, Birmingham has the greatest proportion of unappealed properties, equating to 37,365 premises and a potential total refund value of £117m. It is followed by Manchester, Cardiff and the City of London.

John Webber, head of rating at Colliers International, said: "Most businesses won't be aware of these changes. There are genuine concerns that less business rate-savvy companies will lose out."

Business rates, one of the biggest overheads for companies, are calculated according to the rental value of a commercial property. They are set by the Valuation Office every five years and collected by local councils. The current ratings were set on April 1, 2010, and are due for renewal on April 1, 2017.

Until now, appeals against rateable values could be backdated to April 1, 2010. However, the Government announced in last year's Autumn Statement that it would limit backdated savings on ratings appeals from April 1, 2015.

If companies fail to log an appeal before March 31, they will only receive a rebate backdated to April 2015. It means that a maximum refund from an appeal will only be two years, rather than the current seven.

Grounds for appeal include circumstances where the valuation of the commercial property was wrong, where the building has been demolished or where a premises has been converted into a home.

Surveyors at London Clancy highlighted that it is "vital" that advice is taken on the prospects for a successful appeal as soon as possible.

Frank Alder, head of northern rating at Matthews & Goodman, explained: "The announcement is unwelcome news for business rate payers, particularly given the present opposition to the current rating system. 

"The system is over 400 years old and fails to reflect the modern commercial landscape. We have a situation where high street retailers, particularly the smaller ones, are already struggling to compete with businesses that are trading online and this limitation of their rights is a further blow."

Paul Nash, head of business rates in London and the south east at Lambert Smith Hampton, warned: "A company's failure to appeal could, in one fell swoop, wipe away five years worth of savings.

"However, it is a double-edged sword. Some properties are undervalued. Any ill-considered appeals could see companies ending up with their rate liabilities going up.

"It will lead to a big influx of appeals over the next five months. There is already a big backlog and this will add to it."

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