Under Check, Challenge, Appeal (CCA) business owners could be hit with significant financial penalties following the government’s decision to introduce fines for incorrect information provided by ratepayers or their representatives.
CCA Penalty Regime Confirmed
The Statutory Instrument containing the penalty regime to accompany the Government?s new CCA business rates process has now come into force, largely unheralded.? The CCA system has been in place for the 2017 rating list since April last year.? However, due to the original legislation being rushed, the proposed civil penalty provisions were omitted from the initial regulations and only now introduced.
These regulations, which are to be administered by the Valuation Office Agency (VOA) and adjudicated Valuation Tribunal England (VTE), have significant implications for ratepayers and should be considered carefully prior to beginning the CCA process.
The regulations seek to impose a penalty of ?500 (reduced to ?200 for small proposers*) where information supplied ?in or in connection? with a proposal to alter the rating list is found to be ?false in a material particular? and has been provided ?knowingly, recklessly or carelessly?.? Importantly, an omission to provide, or confirmation of false information either knowingly, recklessly or carelessly, will also render the ratepayer liable for penalty.
The nuance of the ?in or in connection with a proposal? is important as it allows the Valuation Office Agency to seek to levy penalties at all stages of the process, not just at Challenge.? In addition, the legislation allows for penalties to be imposed in respect of each false material particular supplied.? As such, it is possible for a proposer to receive multiple penalties on the same property.
Ability To Backdate Inserted
Perhaps most disturbing of all is the inclusion of ?transitional provisions? which allow the VOA to impose penalties for information deemed to be false in a material particular provided prior to the implementation of this legislation.
Given the complexity of business rates assessments and the lack of clarity provided by the VOA as to how they are compiled, it is not difficult to envisage how a typical ratepayer, who is not an expert, could easily fall foul of this legislation and incur significant penalty costs.? It is not clear at this time how vigorously the VOA will seek to enforce the regulations; however, it is reasonable to assume that factual matters such as floor areas, value and significant specification items like air conditioning, heating, raised floors, roof linings and lifts will all be high on their hit list at the Check stage.? Within Challenge, any rental evidence provided which subsequently turns out to be erroneous could well be punished by a penalty.
Appeal against a penalty (either the imposition or amount) is possible within 28 days of receipt of the notice and will be adjudicated by the VTE.
The draconian nature of this legislation is disturbing, and simply adds to the complex and cumbersome character of the new business rates appeal process.? Both the Government and the VOA deny that the new procedures are designed to deter appeals; however, it is reasonable to assume that any unrepresented ratepayer would need to think very carefully prior to beginning the process.
Small Proposers
* For the purpose of the regulations a small proposer is defined as one who falls within the definition of ?micro business? in section 33 (3) of the Small Business, Enterprise and Employment Act 2015.? In effect this means:
- A balance sheet total of no greater than ?2 million in the previous 12 months;
- a turnover of no greater ?2 million in the previous 12 months;
- an average number of persons employed of less than 10. ????
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