A coalition of trade bodies has urged the government to abandon “unjust” changes to the business rates appeals system that could leave businesses over-paying tax by 10% or more for several years.

Proposals outlined in a government consultation suggest that the Valuation Tribunal for England (VTE) will only be able to order a change to the rateable value of a business when it considers it to be inaccurate outside “the bounds of reasonable professional judgement”, which the group claimed could be difficult to determine.

In a joint letter to communities secretary Sajid Javid, the organisations – which include the Association of Convenience Stores - warn that the proposals, if brought forward, will:

  • Cause individual businesses to sink into hardship, pushing those already struggling into insolvency;
  • Undermine businesses’ confidence that their rates valuations are correct; one of the government’s main aims in reforming rates appeals;
  • Potentially lead to a host of legal challenges, particularly as to what constitutes “outside the bounds of reasonable professional judgement”; and
  • Prevent an independent organisation (the VTE) from correcting excessive tax assessments.

The letter points out that OECD studies show that the UK now has the highest level of property tax, measured as a proportion of GDP, of any major developed economy.

It further notes that in 2000 the government consulted on a similar proposal, but deemed it unfair to ratepayers and concluded that it should not be adopted.

James Lowman, chief executive of the Association of Convenience Stores, said: “Business rates are already one of the biggest fixed costs for many convenience store retailers, especially those operating on petrol forecourts.

“We do not believe that the appeals proposals are fair, and are concerned that retailers who are successful in their appeals could still end up paying up to 10% more than they should do.”

The coalition also includes the British Property Federation, the Association of Licensed Multiple Retailers, the Business Centre Association, and Revo, previously known as the British Council of Shopping Centres.