BUSINESS RATES SCAMS AND FRAUD
Business Rates Fraud
Who’s responsible for paying the business rates? The occupier of the premises is responsible for paying business rates. This will usually be the owner or the tenant. Sometimes the landlord of the property charges the occupier a rent that also includes an amount for the business rates.
Business rates fraud is committed when someone deliberately gives false or misleading information so that they can pay lower or no business rates. It includes: stating that a property is no longer in use and therefore qualifies for a reduction in rates.
There are a number of ways that businesses can commit business rate fraud, including
- Not declaring all of their properties: Businesses are required to declare all of their properties to the Valuation Office Agency (VOA). If a business fails to declare a property, they may be able to avoid paying business rates on that property.
- Declaring a false rateable value: The rateable value of a property is used to calculate business rates. Businesses can commit fraud by declaring a false rateable value for their property. This can result in them paying lower business rates than they should.
- Not declaring changes to their business: Businesses are required to notify the VOA of any changes to their business, such as a change in the use of the property or a change in the amount of floor space. If a business fails to notify the VOA of a change, they may be able to avoid paying business rates on the property.
If you suspect that a business is committing business rate fraud, you can report it to your Local Council.
Business Rates Avoidance and Evasion
National Non-Domestic Rate (NNDR) fraud is when a business avoids paying the correct fees for local services.
A business might avoid paying the costs by:
- false claims for discounts & reliefs
- failure to notify liability for National Non-Domestic Rate (NNDR)
- setting up false companies (known as ‘Phoenix Companies’) where the assets of one Limited Company are moved to another legal entity so that a debt is written of. The directors usually remain the same and in some cases the new company has the same or a similar name to the failed business
For futher information: https://assets.publishing.service.gov.uk/media/64a58c677a4c23000cbba21a/A_E_consultation_FINAL.pdf
Business Rates Reduction Firm Scams - THE BIG WARNING TO UK BUSINESSES
Trading Standards have warned of’reduction’ firms that are conning local businesses. Not all firms or agents behave like this, but the ones that do are committing fraud and are deliberately causing confusion within the industry. Businesses are led to believe they will get their business rates reduced on appeal as a guarantee. Their is no guarantee that it will be; it is based on a number of factors. Due diligence is a must when considering engaging an agent. Ensure your appeal is handled by an honest and experienced firm or agent; sadly, that is not always the case.
Local authorities are required to collect business rates on behalf of the central government. Businesses are revalued, and new rates are applied every five years.
Every five years, when the new rates are applied to business premises, trading standards and local councils receive complaints about rogue firms that deliberately target businesses whose rates have increased.
Our advice to businesses is to complete a ‘Due Diligence’ check on the firms that cold call, offering to do a rating appeal. Check all the small print on contracts, which are often carefully worded, and be aware of inaccuracies that don’t match up to the verbal promises the salesperson makes. Once you’ve signed and paid, you will have no automatic right to cancel in most instances.
You can contact the local valuation office before you agree to anything. The firm you agree with should be a registered agent of the VOA, and should be able to provide you with full details of their firm. Details of the appeals procedure are included in the revaluation notification and in the notes accompanying the rate bill from the local authority. You can also find details on the Valuation Office Agency website. But remember, if you appeal, your rates could go up as well as down. It is dependent on the actual evidence that can be provided, and the time taken to put an appeal together to the point of completion can be extremely time-consuming and may not result in a reduction at all.
Our advice is for businesses to be very cautious of claims from Firms that say they can secure reductions in business rates. Ask for written confirmation of such claims and a breakdown of why they feel the commercial property in question is possibly overvalued. If the company refuses, AVOID.
No Win, No Fee - READ THE SMALL PRINT AND AVOID HIDDEN FEES
As the old saying goes…When somethings sound too good to be true, it usually is. From SME agents to Large Corporate Firms who specialise in the reduction of business rates, commissions can be extortionate. It is great that you, as the business owner have now finally received a reduction to your rated value, The issue if not investigated in depth, is the cleverly worded contracts that the No Win No Fee legal teams have put together which could lead to a financial trap. Their are hundreds of examples if researched of business owners who thought it would be their best option at the time being faced with problems such as late payment fees, cancellation fees, year-on-year fees, and many others attached to the No Win, No Fee terms. Before you consider No Win, No Fee, take your time to carefully read the small print and fully understand if this is the best option for your business or if you are going to end up paying much more than an agreed up-front fee.
Client Reviews - DONT BELIEVE EVERYTHING YOU READ
All businesses rely on their customer feedback, and agents or firms in business rates are no different. When it comes to online review platforms, the issue is that fake reviews do happen. They are as easy to make as real reviews on many online platforms. They are used to persuade you that the firm is reputable. At the end of the conversation, the choice to go to appeal and allow an agent to act on your behalf is completely your choice. Our advice is to make sure that you have done your full due diligence about the firm, know the full details of the legal contract you are signing, and take into consideration that, whichever way your service may go, the outcome of your appeal is never guaranteed until the appeal process is complete.
IF YOU HAVE READ THE ABOVE AND ARE STILL CONSIDERING TO APPEAL YOUR VALUATION, WE ARE READY TO SUPPORT YOU
FIRST STEPS AS THE RATES PAYER BEFORE INVOLVING AN AGENT FOR YOUR APPEAL:
- Once you have completed the registration for your Government gateway ID and business rates valuation account, we can then commence as your agent. Enquiries and appeals can then be logged by us from then on.
- Unfortunately, everyone must go through this process, and an appeal cannot be filed until it is completed by the rates bill payer.
- We would be more than pleased to assist you with this procedure.
The process will take around 10 – 15 minutes to complete. To register you will require the following:
- The Current rates bill of the property
- ID PROOF: Passport / PAY SLIP / P60
- NATIONAL INSURANCE NUMBER
Create or sign in to your Business Rates Account HERE: https://www.gov.uk/business-rates-valuation-account
Registering us as your agent: After you have set up your Business rates Valuation Account, You will then be able to add an agent of your choice to your property/s – If you would like us to handle your appeal please call us first on 0800 002 5291. We can then provide you with our VOA Agent ID and act on your behalf with the Valuation Office Agency (VOA) for all future correspondence.