Business Rate Scams

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Business Rate Scams

Post by Mr Admin on Sun Feb 17, 2013 10:20 am

This is a very old scam that has been doing the rounds, and especially hitting the Licensed Trade.

Your Rateable Value (RV) which is set every five years by the Valuation Office, can only be appealed once during each assessment period (of 5 years). They run as follows: 2005, 2010, 2015, 2020, 2025. Each time they are re-evaluated, this is known as an assessment period.

They can go UP as a result of a shoddy appeal.

When you lodge an appeal, you must have very good reasons under which the appeal is submitted. However you do not need any valid grounds whatsoever in order to submit the actual appeal. You could for instance state 'paying too much. Takes the piss', and the appeal would generate a standard Valuation Office Agency (VOA) letter entitled 'Acknowledgement of Appeal'.

Now Rating Cowboys enjoy hitting Pubs, because generally Landlords are charged a lot for their business rates, so they know that the accord will be that the Landlord is unhappy about the amount he/she pays.

It is therefore fairly easy for the Rating Cowboy who will be very professional, and knowledgeable (compared to you) to get you to sign up and pay a fee.

They will claim that a Letter of Acknowledgment is the acknowledgement that your appeal is valid. It isn't. It is a standard letter, printed by an electronic machine in response to the submitted appeal.

They will con you that the acknowledgement means that they have successfully lodged an appeal. This is correct. It does not acknowledge the fact that when your case in scheduled for a hearing at a Tribunal, that a person from that company will be bothered to represent you. They won't despite promising they will, because although to you they seem to know a lot; to a VOA Surveyor they know absolutely f*@k all.

Do NOT believe everything you hear about Transitional Relief, or big rebates being returned to you for any overpayment going back 5 years.

Their contracts allow them up to 5 years to lodge the initial appeal, to their own discretion. Well if they came to your premises and said you were being overcharged, then wouldn't you assume they would want to lodge an appeal immediately. It is a way of wriggling out of their obligations, by providing you with nothing.

They may even have the cheek within their contract, to invoice you a percentage of your lower RV if they are actually successful in reducing your appeal.

The danger here is that the RV is pretty much divided in half when you apply a multiplier (approx. 0.45%). This calculates the amount you PAY, which is more than half of your actual RV.

Example:- Your Rateable Value (RV) is £10,000. Your RV has a multiplier of 0.45% applied to it, so you actually have to pay £4500. An appeal reduces the RV to £9000.

In this scenario, the Cowboys will charge you 50% of the reduction in your RV which in the above scenario works out to be £500. You will be paying £450 less, so you are £50 out of pocket. You will have definately paid an upfront fee in addition to this.

Do not negotiate on the percentage of the RV, to justify an up front fee, because if the Cowboys have 5 years to lodge an appeal, you can be confident that in 18 months, the company will have disappeared off the face of the earth.

They are set up to con you, and virtually all of them do.

You can lodge an appeal yourself, if you believe it to be unfair and it will cost you nothing whatsoever via the VOA website.

Always use a RICS Surveyor, and not a company who is not regsitered on the RICS website. If they claim to USE RICS Surveyors, it is because they are not Chartered Surveyors themselves. They may tell you they are, but unless it is in writing, you will not to be able to disprove their claim of innocence. They are also jumping through the loophole of not being genuine Chartered Surveyors, and having to account to strict guidelines. If they are affiliate members, beware, as this means that they subscribe to a good practice newsletter. No more than that.

If they claim to follow the RICS Code of Practice, it also means nothing. They are not audited, and anyone can claim to follow the code, including a parrot. It doesn't mean that they actually are following it, or bound by it. In fact the RICS doesn't even know of the existence of half of those claiming to be following it. It is as binding as following someone on Twitter.

When it comes to Business Rates Appeals, pay experts, and when I say that, I mean RICS Chartered Surveyors who provide you with a membership number that corresponds with the RICS website; and no-one else.
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