Retailers warned about business rates relief scam

Retailers are being targeted by ‘rip-off agencies’ looking to exploit a new retail rates relief scheme that begins this April.

Chartered surveyor Ian B Sloan warned RN that retailers he works with had been approached by agencies promising reductions in business rates.

Sloan said: “Retailers need to be suspicious of anybody promising to reduce their rates in any way other than an appeal of the premises’ rateable value. Retail relief should be applied automatically.” 

Under the scam, retailers are asked to sign contracts or agree over the phone to terms that charge a percentage fee of any reductions in business rates, regardless of whether these reductions are automatically applied by a local authority.

In 2015, the department for business warned retailers about RVA Surveyors following comments made in a parliamentary debate. 

One shop owner told RN they were forced to pay the firm £5,700 last year, despite evidence that RVA Surveyors were not responsible for any rates decrease. 

A lawyer acting for the firm said this was “entirely refuted”. RVA’s agreements from 2015 demanded 45% of any reduction in rates for five years. The contract stated this was “payable whether or not RVA is shown to be the effective cause of any such reduction”.

With the upcoming relief changes, the cost for retailers is now far higher. From 1 April, retailers will receive 33% off their rates on properties with a rateable value of less than £51,000. 

The relief is scheduled until April 2020, but Sloan suggested this would be extended: “There’s no way the government is going to up rates by a third eight weeks before the scheduled general elections.”

Based on RVA Surveyor’s terms, those caught out by a scam would have to pay up to £13,911.39 per property. RN has uncovered other ‘business rates agencies’ that also attempt to get retailers to sign similar contracts.

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