Legal challenge to business rates Covid block fails

Business rates specialist Altus Group has lost its test case challenging a government policy that restricts business-owners from seeking a reduction to their business rates due to Covid. Altus brought 26 cases to the Valuation Tribunal last week. The Valuation Tribunal is an independent judicial body that provides dispute resolution for council tax and business rates. It hears and rules on disputes where ratepayers and council taxpayers challenge the amount they are asked to pay. Altus argued that the tribunal should ignore legislation seeking to restrict the circumstances in which a business can apply to the tribunal to have its rates reduced. During the pandemic, around 170,000 businesses sought to have their business rates reduced, arguing that the restrictive measures brought in to combat the spread of Covid had made their commercial property less useful. While the government initially agreed, in March 2021 chancellor Rishi Sunak announced new measures. The government planned to introduce a £1.5bn business rates relief fund, but it also said it intended to legislate to prevent businesses challenging their rates with the argument that the pandemic represented a “material change of circumstances”. It is this legislation that Altus challenged in the Valuations Tribunal. According to court papers, Altus argued that the legislation does not effectively bar the tribunal from taking the pandemic into account. As well as legally ineffective, Altus argued that the policy is wrong in law. However, in a ruling posted to Altus on 25 May, the tribunal dismissed all 26 cases. The three-person tribunal ruled that the legislation “clearly prohibited the tribunal from giving effect to the proposed reductions or indeed any form of reduction in respect of these appeals”. “This was because the grounds and the additional evidence upon which the appellants relied were all either directly or indirectly related to the coronavirus,” the ruling said. The ruling stated that the intention of the legislation was to “effectively nip in the bud any potential loss of non-domestic rating income”. Robert Hayton, UK president at Altus, called the ruling “a pyrrhic victory for the government”. He said it was “very short-sighted”. “It will hinder the recovery from the pandemic and add to the woes firms up and down the country face from the ‘cost of doing business crisis’ which is why we had to test the law. “Working from home and social distancing measures were all accepted as bona fide grounds to claim a rebate and we negotiated in good faith with government agencies for the best part of a year over a framework for the level of rebates on a sector-by-sector basis, only for the government to change the law at the eleventh hour simply to avoid losses in tax revenue,” he said. To send feedback, e-mail newsdesk@eg.co.uk or tweet @EGPropertyNews Photo © Rahman Hassani/SOPA Images/Shutterstock