Valuation Office Agency Highlights the Impact of the New Civil Penalty

12 November 2003

The passing of the Local Government Act, on 18 September, gave the Valuation Office Agency (VOA) the power to levy a civil penalty on anyone who fails to provide the information the Agency requires to value properties for business rates.

Where the Valuation Officer formally requests information, the new legislation allows 56 days for completion and return of the relevant form. This is more than double the time allowed under the previous system. Once this period has expired, a fixed penalty of £100 can be applied; if the information remains outstanding after a further 21 days, another £100 may be levied and, after this, there could be a charge of £20 per day until the form is returned.

“We are more interested in obtaining the information requested than in pursuing the application of penalties,” says David Tretton, the VOA’s Director of Rating. “We need this information to ensure that rating assessments are accurate so that ratepayers do not pay any more in business rates than they have to.”

To help people provide this important information, following consultation with business organisations, the VOA has introduced new ways in which it may be supplied. The VOA’s ‘Request for Information’ forms have been designed with clarity and ease of completion in mind; most people will be able to use a standard form and this is available on line as well as in print.

For individuals and companies, and their agents, who are responsible for more than one property, the VOA has developed a special facility for sending large amounts of information electronically – this is accessible from the VOA website.

“We have invested a great deal of effort to make it easier for people to give us information, but we need an effective method of ensuring people comply, ”continues Tretton.“ The new civil penalty will provide that but, to give people time to get used to the new arrangements, we will not apply the new civil penalty until 2004.
However, this does not mean that the VOA will not pursue requests for information. If you have been sent a form, please ensure it is completed and returned to us as soon as possible as it is the person to whom we send the form (not their agent) who is liable.”

For a number of reasons, including recent difficulties with the postal system, the VOA will not apply the new civil penalty before the end of December. However, from the beginning of January 2004, the VOA will be taking action to apply it to those who continue to withhold information considered to be important.

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Notes for editors:

The Valuation Office Agency
The Valuation Office Agency (VOA) is an Executive Agency of the Inland Revenue. Its main responsibilities are assessing rateable values for the purpose of non-domestic rating and valuing domestic properties for Council Tax purposes in England and Wales. It is also involved in establishing capital values for the Inland Revenue in connection with capital gains tax and inheritance tax as well as carrying out a range of property related services for other government departments and public sector bodies. It has around 4,500 employees and a network of 80 offices throughout England, Wales and Scotland, which provide a local service.

Non Domestic Revaluation 2005
Every non-domestic property, the majority of which are occupied by businesses, has a rateable value that is assessed independently by the Valuation Office Agency in England and Wales. The VOA has a statutory duty to review rateable values every five years; the last revaluation took place in April 2000 and the next is due to come into effect in April 2005. In broad terms the rateable value is a professional judgement of the open market annual rental value of a property at a fixed date. Using the same date (1 April 2003 for the next revaluation) means that all properties have rateable values assessed on the same basis.

Rateable value is a key factor in the calculation of business rates. Rateable value is not the amount of rates to be paid, it is a figure used in the calculation. The amount of rates to be paid is based upon the rateable value of the property multiplied by a factor (the national non-domestic rate multiplier) set by Government. Reliefs or other adjustments, including transitional relief, may also affect the rate bill. Because of these other adjustments, an increase or decrease in rateable value may not automatically lead to a larger or smaller rate bill. Local Authorities are responsible for calculating rate bills and collecting rates.

The VOA has introduced a number of initiatives to modernise the revaluation process. It is working closely with ratepayers and their representatives to improve the transparency of the system; to make sure it is as easy as possible for relevant property information to be collected by the VOA and to assist in ensuring that the new rating assessments are right first time and easily understood by ratepayers.