Part 10A Overview of Check, Challenge, Appeal (CCA) in Wales
The Valuation Office Agency's (VOA) technical manual for the rating of business (non-domestic) property.
1 BACKGROUND
In 2023 new regulations were introduced for Wales regarding the procedure for challenging the assessments of properties for all rating lists compiled on or after 1 April 2023.
The new system in Wales is referred to as Check Challenge Appeal or Gwirio, Herio, Apelio in Welsh.
For rating lists compiled before 1 April 2023 in Wales the previous procedures still apply.
This section is divided into chapters to reflect the different procedures that are applied, so it is important that the correct regulations are followed for the relevant rating list year and location of the property.
Summary of Relevant Legislation and Practice Statements
Most of the references in this document refer to the Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023, where other Regulations are referred to these are identified
Relevant Legislation
(a) The Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023
(b) The Non-Domestic Rating (Material Day for List Alterations) 1992 (SI 1992/556) (as amended) (Material Day regs)
Glossary
‘VO’ in this document refers to Valuation Officer
‘VOA’ refers to the Valuation Office Agency
‘CVO’ refers to the Central Valuation Officer
1.1 CHANGES
When the 2023 rating lists came into force on 1 April 2023, new Regulations were introduced changing the process for altering and appealing a rating list in Wales.
The new procedure is commonly known as Check, Challenge (proposal stage), Appeal or Gwirio, Herio, Apelio in Welsh. Unlike previous proposal and appeal procedures prior to2023, the progression through to the next stage of the process is not automatic. The Interested Person (IP), defined below, has to actively submit information via the specified electronic portal to initiate the start of each stage.
The main changes in the Regulations are summarised below:-
1) Introduction of VOA’s electronic portal to request and supply Check information (Reg 6(5)) or other manner as agreed with the VO. The portal is also used by the VOA for parties to register their identity and legal interest before a check can be submitted.
2) Grounds of proposal are set out in Reg 4 (largely as before but with the requirement for additional information that must be supplied)
3) Check process requirements (Reg 5)
4) Challenge - Submission of proposals (Reg 11-13)
5) Incomplete proposals (Reg 14) replaces invalidity
6) Procedure for dealing with proposals (Reg 15)
7) Appeal process and changes to the grounds of Appeal (Reg24) via electronic Valuation Tribunal (Wales) (VTW) portal (Reg 26)
8) Material day - changes (SI 1992/556)
9) Introduction of new Penalty processes for false information provided by the IP (Reg 16)
The process now comprises Check, Challenge (submission and consideration of the Proposal) and Appeal (see CCA Process overview Appendix1) The system is based on a three-stage process – Check, Challenge, and Appeal (CCA).
The three stages manage the flow of cases through the system and allow IPs to make an informed decision before proceeding to the next stage. Both the IP (or their agent) and the VO are required to set out the issues and arguments early in the process to encourage early settlement and reduce the number of speculative appeals. The aim is that the issues in dispute are fully addressed where possible at each stage of the process.
The VOA has developed a digital service to support the system. The majority of checks and challenges are handled through this new digital service. Guidance to the service can be found on GOV.UK Find and check your business rates valuation - GOV.UK
The digital service requires the IP to declare their legal interest in property and, if the IP is represented by an agent, to formally declare the instruction through the VOA portal. The portal holds documents and correspondence between the VO and the IP, which both parties can view and which potentially could form part of a later appeal.
SUMMARY OF EACH STAGE OF CCA (Wales 2023 and subsequent lists)
Please see Appendix 1 for a summary chart of key CCA events and legislation
1.2 CHECK
The Check stage requires the IP to confirm the accuracy of the facts upon which the rating list entry is based (as held on VOA’s database) and any subsequent changes to the property.
The IP is required to certify details of the property attributes and other facts upon which the valuation is based. The IP can view the valuation on-line for most classes of property. However, due to the sensitive or complex nature of some classes, those valuations are redacted and the IP can make a request for the valuation details, known as a Detailed Valuation Request (DVR).
Check allows the VO to fully consider the facts and decide whether its records can simply be amended to reflect any changes declared by the IP or whether investigation or a discussion of the facts is necessary. Facts are corrected in Check where possible but facts in dispute might have to be dealt with in Challenge. The outcome of the Check stage may be
1) the facts are agreed and the rating list is either confirmed as correct or altered when necessary to reflect the correct facts, or
2) the facts are not agreed but points in dispute are clearly established so they can be addressed at the Challenge stage, or
3) some of the facts are agreed and the rating list is altered to reflect the correct facts, where necessary, and the remaining points in dispute are clearly established so they can be addressed in Challenge.
The IP should understand at the end of Check why the VO has or has not taken action to amend the rating list. This stage is not where the IP disputes the valuation.
A Check must be made, before a proposal can be made, through the electronic portal or as otherwise agreed with the VO (Reg 6(5)).
On the VOA computer system (RSA), Check case reference numbers start with ‘CHK’ and the reference number for use in Caseworker Suite (the VOA portal where documents are saved) will be found in the RSA case notes.
1.3 CHALLENGE (proposal stage)
If all the issues cannot be resolved in Check, if the IP is unhappy with the outcome of Check, or they wish to challenge the basis of the assessment or the valuation, they can make a Challenge once the check has been completed. The check and challenge must be made by the same IP.
Stages of making a challenge
a) IP makes a proposal
The grounds for challenging the valuation (i.e. grounds of proposal) are the same as available in the previous appeals system, this has not changed.
b) Provision of evidence with the proposal
If the IP is disputing the valuation at the Challenge stage, as opposed to just disputing facts, they have to provide an explanation of what aspect of the valuation they are disputing and why, together with an alternative valuation and supporting evidence or information with reasons and an explanation as to how they relate to the grounds.
The IP is expected to include all the evidence with reasoning, on which they intend to rely at the outset in their proposal.
c) VO reviews evidence
The VO considers the proposal and the evidence, discusses if necessary, and may issue an initial response. All evidence which the VO considers relevant should be included at this stage. Further evidence relating to the grounds of the proposal from the IP or information relating to the proposal supplied by the Billing Authority may be considered. If the proposal can be ‘well-founded’ or agreement can be reached, the VO will amend the rating list if appropriate. The IP may also withdraw the proposal. All agreements or withdrawals will require the signature of the current ratepayer if they are not the maker of the proposal.
d) Issue of Decision Notice
If settlement cannot be reached, the VO will issue a Decision Notice. In the absence of an agreement or withdrawal, the VO asks the IP or their representative to outline what issues remain outstanding. The VO ensures that the Decision Notice addresses all of these unresolved issues and that their opinion is supported by evidence as necessary. No new evidence may be included in the Decision Notice at this stage. At the end of Challenge the IP should have a clear understanding of the VO’s view of the valuation and the issues in dispute.
When the Decision Notice is issued, or if 18 months has elapsed from the date of Proposal, this denotes the end of the Challenge stage and the 4 month window for appeal begins.
1.4 APPEAL
Only a proposer or substitute proposer may make an appeal to the VTW and where:
Reg 24
a) the VO has not altered the list
b) the VO has altered the list otherwise than in accordance with the proposal
c) the VO has not issued a Decision Notice within 18 months of the date of proposal (or such longer period as is agreed in writing by the parties) and it has not been either withdrawn or agreed.
The Appeal stage allows the IP to dispute the VO’s Decision Notice at the end of the Challenge stage.
An Appeal has to be submitted with specified documents within 4 months of the Decision Notice being issued or 4 months after the time period in (c) above has lapsed.
The VTW considers if the VO’s decision is correct based only on the information presented at the Challenge stage. New evidence may only be admitted by the VTW in limited and specific circumstances.
This restriction is designed to ensure that the IP and the VO engage at the Challenge stage and do not expand the case with new evidence at Appeal stage.
The VTW may conclude that the existing rating list entry is correct, that the IP’s proposed alternative rating list entry is correct or it may substitute its own.
The IP appeals directly to VTW.
The Appeal is submitted via the VTW electronic portal and the Challenge documents constitute the evidence basis of the appeal.
Hearings follow the VTW Best Practice Protocols and the procedural regulations contained within Part 5 of the Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023.
Appeal against the VTW decision is to the Upper Tribunal. (See RM section 7 for further details on this process)
1.5 END OF LIST PROVISIONS
The Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023includes procedures in respect of the closing of the 2023 and subsequent lists. See below at Appendix 6 for full details on the impact on the CCA process. (5A End of list provisions)
2 DEFINITIONS
The definitions of the parties involved in the CCA process are within the legislation and these are summarised below and may be found in the Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023 Pt 2 Interpretation: General:
Interested Person - IP
a) This is defined in the Regulations as:-
for Crown Estate hereditaments - the Crown Estate Commissioners
b) for other hereditaments
i) the occupier;
ii) any other person with a legal estate or equitable interest entitling possession to the hereditament or any part of it;
iii) any person having a qualifying connection with the occupier or person falling within (ii).
This may be where one company is a subsidiary of another, or subsidiaries of the same company, or is a holding company of the other.
This would not include a management company if they have no legal interest in the property.
The BA is not an IP who can make a proposal unless it has an interest in the actual property in question.
If the hereditament has been demolished, then the person who was the occupier no longer qualifies as an IP.
Former Interested Person (former IP)
There are two types of former IP
(1) An individual or company who was an IP at the time a request for information at check was made (Reg 6) but who has since left the property.
This type of former IP who has completed a Check can go on to make a Challenge (within 4 months of that Check) under any grounds, even though they are subsequently no longer an IP (Reg 4(2)(b))
(2) An individual or a company that is no longer an IP, but had an interest in the property during the life of the list and left before submitting a request for information at check.
This type of former IP (2) can still make Checks, Proposals and Appeals at any time, but only in relation to the time they were an IP, and only on the following grounds:
(Reg 4(1))
(c) A hereditament’s rateable value is inaccurate due to a change in which types of plant and machinery need to be taken into account (Reg 4(1)(c)).
(d) The rateable value is inaccurate following a change by the VO (Reg 4(1)(d)).
(f) The list shows an alteration as applying from the wrong date. (Reg 4(1)(f)).
IP in administration / receivership
Care must be taken when identifying the IP or former IP, particularly where a company has gone into administration or receivership or entered into a CVA agreement.
Under CVAs, a new company is formed and is a separate entity to the original company. If a check or challenge has been submitted by the original company, a new IP may exist in the form of the new company or new agents may be appointed, who will have to be included in the CCA process.
The administrators/receivers themselves stand in the shoes of the original company and can do anything the original company could do. They are the same IP as the original company and not a new IP.
If the business is sold on then depending on how the company is run then the Ratepayer may stay the same or a new IP (ratepayer) comes into existence. e.g. if the assets and branding are sold on to a third party but not the company then the third party becomes a new ratepayer. If the original company as a whole is sold to the third party, then the third party continues as the original IP, there is no new ratepayer
Party to an appeal
A party to an appeal under the penalty procedures (either for providing false information under the Check procedure or for failing to complete a Form of Return (RALD)) includes the appellant and the VO or CVO, as appropriate.
A party to an appeal to the VTW (Reg 24) includes:
-every person whose agreement is required under Reg 22 and
-anyone who has been a ratepayer of the hereditament since the date of confirmation of check and has notified the VO before the hearing/determination that they wish to be party to the appeal. (Reg 2(3)(b)(ii))
Proposer means the person making a proposal
Ratepayer means the occupier or if the hereditament is not occupied, the owner
Relevant Authority means the authority in whose area the hereditament is situated
Substitute Proposer
This may arise when the original proposer wishes to withdraw a proposal and an IP (who opted in within 2 months of the VO receiving the original proposal) objects in writing within prescribed time limits to it being withdrawn. In this circumstance the opted in IP becomes a substitute proposer. (See 7.2 below and regulation 21)
Valuation
At appeal stage, (Reg 24(3)) ‘Valuation’ means the ‘Rateable Value’ as determined under Schedule 6 to the Local Government Finance Act 1988.
‘VO Electronic Portal’ means the online facility provided by the VO for use in connection with proposals for the alteration of a local list compiled on or after 1 April 2023.
Working Days
A working day is any day except:
a) Saturday or Sunday
b) Christmas Day
c) Good Friday and
d) any Bank Holiday