Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2018 — House of Lords, 2018-02-01
Topic: Domestic Commerce
John Lytton (Crossbench, Unknown): My Lords, I first declare a professional interest as a property consultant and a member of bodies concerned with business rates, as a vice-president of the LGA and, from time to time, as a non-domestic ratepayer. It will be no surprise, and I am sure that the Minister will understand, that I am coming at this somewhat from the ratepayer standpoint My concerns are with the penalty for inaccurate information under new Regulations 9A to 9D. I entirely accept what the Minister has said: the system needed a thorough going over. But I have a question surrounding the terminology of "knowingly, recklessly or carelessly" providing false information in new Regulation 9A(2)(b) Penalising deliberately providing misleading information is absolutely fine in principle. I make no observation about the quantum of the fine either or, for the most part, the mechanisms for imposing it and appealing it. But if the process of "check, challenge, appeal", as I perceive it, involves systemic complexity and a requirement for information from a ratepayer that they are unlikely to possess and probably cannot verify, the risks of infraction become unreasonably high. It is the working environment rather than purely the penalties that I will concentrate on We know that the intention is to discourage false information and that there was a problem about that in the past. All too often, it was perpetrated by so-called business rates consultants, who were, sadly, on a number of occasions, proven to be neither professional nor honest. But rather than tackle them—they were known firms and bodies—it seems to have been decided to scapegoat by design every appellant ratepayer. I do not accept that approach Noble Lords will also be aware that new arrangements for "check, challenge, appeal" mean that most of the proposals to alter entries in the rating list must be made via a government portal. That requires an individually named person to register by giving a lot of personal information. For example, for an SPV that has no employees and no land with buildings for development, that is clearly unworkable. I am also told that a number of local authorities are finding this difficult as well. If you do not have a UK passport or UK national insurance number it has to be done manually. If you register but then forget your password, I understand that there is no reset provision. If you have multiple properties, each must be individually linked to the person registering and the details re-entered for each one. If you appoint an agent, he or she has to go through this again once they have received a formal notification through the system that they have been appointed. Annoyingly, if as sometimes happens the agent does not get the notification, I am told that the only advice the Valuation Office Agency was able to give was that the ratepayer should deregister. In other words, they must reverse the entire process and re-enter the whole lot de novo. That cannot be right Once the registration has been done, the check stage comes in. As the Minister has said, that is the point at which a lot of information needs to be put in about the property. Some of the requirements are a little opaque, shall I say, such as how many floors the property has. Apparently one can select from minus nine to plus 55, which is mathematically slightly Quixotic but also happens to rule out the Shard. One may also be asked about the eaves height, for which the Shard would also be a non-qualifier. At other times people have been required to provide a net internal floor area for a property customarily measured and valued on the basis of gross externals. This is beginning to look a little problematic for the ratepayer. One may then be asked when the last refurbishment took place; as if the tenant would necessarily know that. The choices go back in tranches as far as 1900 on the online system. There is also a rather risible suggestion that the lease details or the local planning office might have information on refurbishment. In any case, a refurbishment undertaken 30 years ago is likely to be totally worthless in modern valuation terms I do not wish to poke too much fun because actually this is a very serious business. Let us remember that in the middle of all this there is a ratepayer trying to fill in an online form for which there is a potential liability for inaccuracies. The point I want to make is that the architecture is deficient and the system makes unnecessary and time-wasting demands on ratepayers as well as putting in place tripwires that really should not be there I note the answer given by the Financial Secretary to the Treasury to the Delegated Legislation Committee in the House of Commons on 29 January in answer to the honourable Member for Oxford East concerning rating appeals: "The technical problems we have had with the system some months ago have largely been resolved".—[Official Report, Commons, First Delegated Legislation Committee, 29/1/18; col. 6.] That is not quite the message I am getting through the trade, if I may term it thus. In reality, although the digital platform may have improved, the environment in which it operates has not My concerns are the lack of clarity or definition over what will constitute a culpable error. I noted the noble Lord’s comment that guidance was to be provided. I am not aware that guidance has been provided, but I am aware that rating professionals have been asking the VOA whether it will produce anything to clarify the circumstances that constitute a culpable error, but I have been told that it does not propose to do so. This seems a rather one-sided situation, and the decision to impose penalties seems to be in the hands of a party to the matter even though they do not benefit financially. The process is a touch inequitable and asymmetric as a way of dealing with public administration I want to ask the Minister what proposals there might be to address some of these continuing problems, in particular the absence of a proper definition and guidance. By "guidance" I do not mean some general comment into which one can read anything, but how this will be dealt with and how individual business ratepayers will be protected from an honest error, because it is not clear how that will be done. In particular, I want to know what further steps the Minister feels could be taken to establish greater confidence among business ratepayers about the CCA system, because it seems to be still distinctly lacking.