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According to data released from government agency, the Valuation Office (an executive agency of the HMRC), the first quarter of this financial year 2020/21 has seen an enormous 690% surge in tax appeals in England. This statistic is hugely different to the same quarter in the previous year 2019/20.

From April to June this year there have been nearly 145,000 non-domestic premises such as shops and restaurants where there have been applications for a check on the valuation of the property. In the corresponding period of April to June 2019/21 there were less than 18,500 checks.

Property valuations form the basis of business rates bills and the economic impact of coronavirus has lead to the huge increase in appeals. The formal appeal process comprises three stages and is called the "Check Challenge Appeal". The check is the first stage of this process and its purpose is to agree on the correct property information. Following on from this, a challenge is where you can discuss the valuation.

Alex Probyn, UK President of the real estate advisory firm Altus Group, said the impacts of Covid-19 on commercial properties "are already obvious arising from the national restrictive measures introduced to counter the pandemic and grounds exist to support a substantial and prolonged reduction".

The UK Government has delayed the next revaluation of business rates in England until 2023 so that property valuations can be calculated by reference to emerging post-coronavirus rents that are being paid on April 1 next year. Legislation had been introduced to bring the next revaluation forward by one year from 2022 to 2021, but in the wake of the pandemic MPs now want to ensure retailers and other businesses have more certainty.

Currently the Treasury has written off business rates bills this financial year to the value of £10.22bn for all occupied retail, leisure and hospitality properties.

Stay up to date with the latest changes in finance and accounting with the AAT Accelerated Pathway: Technical Update 2020-21, developed in commercial partnership with AAT.

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