RICS has responded to a Valuation Office Agency (VOA) discussion document on options for prior agreement ahead of the 2010 business rates revaluation.

In the response we raise concerns that there seems to be little change from the position at the last revaluation in 2005.  In particular, we call on the VOA to consider a wider review of changes to the rating system, including the possible options for self-assessment, annual or biennial revaluations, and changes to the rating system to take account of wider changes to the economy (for example the growth of internet-based businesses rather than those based on real property).

We are concerned that these changes are coming at a time when there seems to be a low level of trust between the VOA and ratepayer representatives.  In particular, it seems that changes emanating from the higher levels of the VOA are having little or no impact on the level of confidence in practice at the local level.

Any review of business rates must include the Department of Communities and Local Government as issues like prior agreement can not be seperated from broader policy agendas.  The whole approach to prior agreement and consideration of what might be considered to be a degree of ratepayer confidence and an acceptable valuation varies depending upon the frequency of revaluation.

We await the outcome of Sir Michael Lyons’ enquiry with interest.  This is likely to address the question of re-localisation of the business rate.  The outcome of this debate is likely to affect the degree to which business continues to have faith in the UK rating system and will consequently impact on its desire to invest and participate in the prior agreement process.

For further details contact: publicaffairs@rics.org