More than 133,000 businesses are still waiting for an appeal of their business rates valuation from 2010 to be resolved, council leaders reveal.
More than 1 million businesses have challenged their business rates bill since 2010. The Local Government Association (LGA) said figures published this month show 133,060 appeals have still yet to be ruled on.
Councils do not set business rates or rule on challenges by businesses making appeals. But the result of appeals is that councils must put money aside from delivering the services that local taxpayers pay for and expect until appeals are decided.
The LGA said councils have been forced to divert £2.5 billion away from stretched local services over the past five years to cover the risk of business rates appeals, as they have to fund half the cost of any backdated refunds.
Ahead of a Westminster Hall Debate today (Wed 13 June) on business rates, the LGA is calling on the Government to take the financial risk from business rates appeals away from local government.
The LGA said government plans to allow councils to keep more of the business rates they collect, a move which has been long-called for by local government, makes it even more imperative for reform of the system to protect councils from the growing and costly risk of appeals. This is because they may become liable to pay back even more of the cost of any backdated refunds.
Council leaders are also recommending a time limit for appeals, except in exceptional circumstances. In Scotland, for example, there is a six month time limit for businesses to appeal their valuation.
Alongside reviewing the process for appeals and clearing growing backlogs, the LGA is also urging the Government to modernise the way business rates affect different ratepayers, and tackle the issue of business rates avoidance.