A quarter of businesses that sought a review of their April revaluation received rate cuts, according to figures that have triggered criticism of how the Government is managing the system. Between April and September, 6,000 of the 24,880 businesses whose cases were resolved had their bills reduced following a check of their revaluation. Shadow Chancellor Andrew Griffith said the outcome shows 'the shambolic business rates system is already in chaos', particularly given that officials are aiming to complete all reviews within an 18-month deadline while thousands of cases remain outstanding.
The revaluation has added pressure on businesses already facing minimum wage and national insurance rises. Hospitality has been hit particularly hard, with the sector experiencing closures of pubs and restaurants. Mike Warburton, a retired tax director at accountant Grant Thornton, described the rate reductions being agreed as almost an 'admission of overcharging'. He highlighted the squeeze on hospitality venues, saying: 'We've got restaurants and pubs, which are often at the centre of communities, closing thanks to factors like National Insurance and minimum wage rises. You get to a stage where you just can't make a profit.'
Formal challenges tell a similar story. Of the 5,240 cases that have progressed to formal challenge, only 290 have been resolved, with nearly two-thirds, or 62 per cent, having their rates reduced. Tina McKenzie, national chair of the Federation of Small Businesses, said the success rate 'suggests many firms had legitimate concerns' and represents 'a warning sign to ministers'. Separately, figures show that 53 per cent of businesses unhappy after challenging their 2023 rateable values and appealing had those values cut.
In total, 37,000 businesses in England and Wales have registered for checks of this year's revaluation, with 11,000 still awaiting resolution. HMRC, which is responsible for valuing 2.14 million business premises, said it did 'everything it can to ensure all valuations are accurate' and that it uses 'robust evidence and established industry methods'. The Government said the vast majority of checks result in no change and has introduced support, including a 20 per cent rate cut for pubs, clubs and music venues, axing rates for premises with a rateable value below £18,000.
For businesses facing prolonged assessment delays alongside wage pressures, the slow progress through the revaluation system is adding uncertainty to operational costs at a critical time.