Nearly 130,000 business owners launched challenges against their business rates in the first three months of the year, a fivefold increase on the previous quarter, according to data published by the Valuation Office Agency (VOA) at the end of May. The surge is expected to cause significant delays in processing claims, with the VOA already carrying a substantial backlog: as of May, 87,970 “Checks” and 26,580 “Challenges” remained outstanding in England alone.
Despite the volume, the odds of success are relatively high. The VOA figures show that 57% of firms that pursued a formal challenge ultimately secured a reduction in their bill. Further analysis indicates that 58% of those who moved to the second stage – the “Challenge” – saw their rateable value lowered, while 54% of those who went on to appeal at a tribunal also achieved a cut. Experts have expressed concern that the agency is under-resourced to handle the current workload, raising the risk that businesses may miss opportunities if they do not act promptly.
Why the surge?
The spike in appeals was partly driven by a hard deadline: 31 March was the final date for challenging valuations set under the 2023 revaluation, prompting a last-minute rush. That revaluation, based on rental values from April 2021, had brought an average 10% reduction in rateable values across England and Wales, though with wide variation – department stores saw a 40% cut, while secondary and independent-led retail pitches saw a 20% increase. The 2023 revaluation also aimed to rebalance the tax burden between physical and online businesses, increasing bills for large warehouse operators.
Now a new revaluation has taken effect. From 1 April 2026, updated rateable values based on rental figures from April 2024 apply to more than two million business properties in England and Wales. Overall rateable values are projected to rise by an average of 19.2%, from £70.8 billion to £84.4 billion. Industrial and logistics properties face the steepest increases at 28.6%, offices are up around 6% nationally (with prime locations potentially seeing sharper rises), and retail values have increased by 10%. To cushion the impact, the government has introduced a £4.3 billion support package over three years, including transitional relief, a Supporting Small Business scheme, and permanently lower tax rates for eligible retail, hospitality and leisure properties. At the same time, the multiplier system has been reformed: from two multipliers to five, designed to offer greater support to high streets and smaller businesses while increasing the burden on larger properties.
How to challenge your business rates: the three-stage process
Businesses wishing to contest their rateable value must follow a three-step procedure known as “Check, Challenge, Appeal”. Each stage has specific rules and deadlines.
Stage 1: Check. This is the initial step, where the business asks the VOA to confirm the factual details it holds about the property – such as floor area, use, and physical condition. The aim is to ensure the valuation is not based on incorrect data. Relatively few Checks result in a reduction because they focus only on factual accuracy rather than the valuation itself. Businesses can access their valuation account online to see how the figure was calculated and report any errors. As of May, a total of 341,020 Checks had been registered in England since the start of the 2023 rating list, of which 253,050 had been resolved.
Stage 2: Challenge. If the Check does not resolve the issue, the business has four months from receiving the Check decision to submit a formal Challenge. This is where the case is made that the rateable value has been wrongly estimated. Evidence might include the open-market rent agreed for the property, leases on comparable nearby properties, or proof of a material change – for example, a change in use or local developments that have affected value. The VOA considers the evidence and either accepts or rejects the challenge. Of 59,470 Challenges registered, 22,380 had been resolved, 10,510 were marked incomplete, and 26,580 remained outstanding.
Stage 3: Appeal. If the Challenge is unsuccessful, the business can appeal to the independent Valuation Tribunal Service. There is a fee of up to £300 to launch an appeal, which is refunded if the appeal is won. The claim must be filed within four months of receiving the Challenge decision. Importantly, the tribunal can only consider evidence that was exchanged during the Check and Challenge stages – no new evidence can be introduced at this point.
What to consider before appealing
Many businesses choose to appoint a professional agent to manage the process, particularly at the appeal stage. Agents can advise on whether a challenge is worthwhile and handle the paperwork. The Royal Institution of Chartered Surveyors (RICS) provides a list of firms that adhere to professional standards. However, businesses should be wary of agents that make unrealistic promises or demand large upfront fees.
One important caveat: the appeals process can sometimes result in a higher bill rather than a lower one. If the evidence submitted gives the VOA reason to believe it has underestimated the rateable value, the assessment could be increased. While relatively unusual, businesses should take care not to present information that might backfire.
Before launching a challenge, it is also worth checking whether existing relief schemes already reduce the bill. Small Business Rate Relief applies to properties with a rateable value of £12,000 or less, typically exempting them entirely, with tapered relief up to £15,000. The Retail, Hospitality and Leisure (RHL) relief offers permanently lower tax rates from April 2026 for eligible properties. During the 2023-24 year, qualifying RHL properties received a 75% discount capped at £110,000 per business, and during the pandemic, business rates holidays and cash grants were available.
With the 2026 revaluation now in force, any business that suspects its rateable value is too high should begin the Check process without delay. The VOA data underscores the importance of acting quickly – but also of proceeding with caution, given that the process can cut both ways.
