The Government Valuation Office Agency (VOA) has stepped up its demands to hotel & hospitality businesses and pubs by issuing and aggressively pursuing an increasing number of fines for late Valuation Forms of Return according to Colliers Business Rates Team. This is despite that many such businesses were closed during the pandemic with no one in the office when the forms were issued and who are now struggling to get their businesses back on the road.
Forms of return provide the VOA with basic information about a business’s property, such as rent, lease and ownership details, enabling the VOA to work out the rateable value of the property, which is then used to calculate the business rates. Businesses have 56 days to return the forms, after which they receive a £100 penalty. If the information has still not been provided within the next 21 days, a further £100 penalty notice is issued and from this date a charge of £20 a day is added to the total sum owed until the information is provided. The maximum penalty amount is £500 or the property’s rateable value, whichever is greater. This can run into thousands of pounds.
The issue for the hotel, pub and hospitality sector is that the return forms are much more complicated than other sectors including asking for detailed trade figures for the three-year period (2019,2020,2021), a period in which many such businesses were closed for long periods due to the pandemic and many staff were furloughed. Because traditionally the VOA was more understanding about late returns, many such businesses have not yet collated all the necessary information to make the returns- and are suddenly finding themselves facing ever increasing fines. And in many cases this information isn’t even useful to the VOA as some businesses were making a zero return in the period.
“It’s totally inappropriate” says John Webber, Head of Business Rates at Colliers, “The VOA is gearing up for the 2023 Revaluation and has suddenly woken up to the fact it can make extra monies by issuing fines for late returns of these forms, despite being more conciliatory to rate payers in previous years. We are seeing an increasing number of businesses coming to us to help sort this out, some of them with fines going into hundreds of pounds or more, particularly if there are a number of properties in their portfolio -as form filling wasn’t the key priority for such businesses in the pandemic.”
Colliers says one hotel client that has over 50 properties across the UK received the initial forms when staff shortages were at their highest. The client is now facing an ever increasing fine, but when the agent tried to sort this out there was a delayed response from the VOA, leading to further time penalties.
Webber continued, “Does the VOA really think this is a sensible way to behave? Such businesses have seen a difficult two years with lockdowns, furlough schemes, staff shortage and increased prices, not to mention pre-Christmas edicts about working from home and avoiding socializing. Surely they should be given some slack if they are slightly behind with the paperwork? Particularly when that paperwork has been made increasingly detailed and complicated to fill in? “
According to research one tenth of British restaurants closed their doors permanently due to the pandemic and 1000 pubs/restaurants closed in the 3 months, July to September 2021, after the restrictions were lifted- that’s 16 per day.
Webber added, “The drop in trade over December for pubs, bars, cafés and restaurants is still coming home to roost with estimates that trade fell by a third. It is disappointing the VOA is not showing a more conciliatory approach to a sector just coming off its knees.”