Upcoming retail business rates reductions to create window of opportunity for scammers

Business rate scammers are likely to up their efforts to catch out small shops due to the changes in the latest revaluation list according to experts.

Chartered surveyor Ian B Sloan told RN the newly released property values, which will form the basis for any business rates payable from April 2023, represented good news for many stores.

Most retail premises values have fallen, especially those in town centre locations. This means many stores currently paying rates will see a reduction, even before the improved rates relief announced in the Autumn statement is factored in.

An end to staggered transitions means the full rates reductions will also be applied in the first year, rather than over several.

However, the potential for large reductions in rates payable brings the potential for scammers to exploit the change. Often fraudulent rates firms persuade retailers to sign contracts that give the firm a percentage of any reduction in rates that occurs over the multi-year evaluation period, regardless of why the reduction happens.

Sloan said the severe rates reductions coming into effect in April give scammers ‘a window between now and then to sign businesses up before they are aware of the likely automatic reductions.”

For example, a retailer with rates of £18,000 this year might see their bill fall to £0 next year due to falling valuations meaning it now sits below a threshold and will automatically receive total rates exemption. However, if they sign a contract with rates fraudsters before this point, they are likely to have to pay the firm 25-30% of any saving over the upcoming three year valuation period. This means the retailer would be forced to pay the firm between £13,500 and £16,200.

Sloan advised:  “Retailers should seek advice from known local professionals who have local knowledge or approach their own trade associations.   Never sign up to any long-term contract and seek a second opinion. Some retailers are still paying annual fees having signed contracts from before 2017.”

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