Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2018 — House of Lords, 2018-02-01
Topic: Domestic Commerce
Nicholas Bourne (Conservative, Centre-right): My Lords, the Government are committed to delivering a fair and effective appeals system for business rates that provides an efficient means for ratepayers to challenge the valuation of non-domestic properties. That is why in April 2017 the Government introduced significant reforms to the appeals system, through the new "check, challenge, appeal" framework that is being delivered by the Valuation Office Agency and Valuation Tribunal for England. I hope that noble Lords agree that the system in place before April 2017 was clearly in need of reform Penalties for the provision of false information, which are the subject of the regulations we consider today, are an important part of these overall reforms. They will act as an important deterrent to providing false information that will help to maintain the integrity of the appeals process and the wider business rates system. Under the "check, challenge, appeal" framework, ratepayers are required to provide information to the valuation officer. This is both at the check stage when the underlying facts are confirmed and agreed, and throughout the challenge stage with the exchange of more detailed evidence. In line with other parts of the tax system, penalties will be an important mechanism to support the submission of accurate information. Specifically, the regulations will, if approved and made, provide the Valuation Office Agency with the power to impose a penalty on a person who provides false information knowingly, recklessly or carelessly The regulations specify the level of the penalty, which will be set at £200 for small businesses and £500 for all others. It may be helpful to remind noble Lords that the £500 maximum penalty reflects the level that was specified in the Enterprise Act 2016, which provided the enabling powers for penalties in the business rate appeals system The Government recognise that there may be cases where a person wishes to challenge the imposition of a penalty. The regulations therefore also provide a right of appeal. Any person who is subject to a penalty may, within 28 days of receiving a penalty notice, appeal to the independent Valuation Tribunal for England. Where the tribunal finds in favour of the appellant they will then be able to order the valuation officer to remit the penalty in full. Clearly, it is important that there is no financial incentive for the valuation officer to impose a penalty. The regulations therefore also require that any sum received by the Valuation Office Agency by way of a penalty must be paid into the Government’s Consolidated Fund. This will ensure that the Valuation Office Agency does not benefit financially from the imposition of penalties As part of the wider consultation on draft regulations for the new appeals system, the Government sought views on the proposed approach on penalties. The consultation received over 280 submissions, and the Government’s response was published in March 2017. As set out in the government response, there was clear support for the introduction of penalties from local government. Many businesses also accepted the need for a penalties framework, but expressed concern that penalties could be imposed where ratepayers have made a genuine mistake. Some respondents suggested that the level of penalties should be linked to rateable value, to ensure that they are an effective deterrent for large businesses In light of the concerns raised, the government response confirmed that the Valuation Office Agency would provide clear guidance to support ratepayers with the provision of information and on the application of penalties. Where ratepayers feel that a penalty has been unfairly imposed, as I have already outlined, they will have a right to appeal to the independent valuation tribunal. While these are important provisions to support a fair system, the consultation also confirmed the Government’s clear view that ratepayers have a duty to take reasonable care in providing information on their tax affairs Noble Lords will no doubt be aware that the wider reform to the appeals system is not without its critics and that the concerns of some noble Lords were discussed at length on a Motion to Regret late last year. Given that discussion, I do not propose to revisit those concerns in detail today. Suffice it to say the Government remain clearly of the view that the reforms were an important and necessary step to fixing what was clearly a flawed and inefficient system for all involved. I reiterate that we expect the Valuation Office Agency to continue to work closely with ratepayers to ensure that the system is meeting our objective of a more efficient and effective system For the purposes of today’s debate and the specific regulations at hand, I hope that noble Lords agree that it is entirely right that the system is supported by appropriate powers to penalise the provision of false information, and that these are accompanied by appropriate safeguards, such as the right of appeal, to ensure the system operates fairly and effectively. I commend these regulations to the House.