Business leaders believe the Government's planned block on appeals against incorrect rates valuations may be ‘illegal' and have urged Whitehall to rethink its policy.

The Government has proposed a ‘reasonable professional judgement' provision in draft regulations reforming business rates due to go before Parliament in April.

This would mean that ratepayers would not be allowed to appeal an incorrect business rates valuation if it was inside a ‘reasonable margin' of error.

According to a letter signed by 13 trade bodies, including the Confederation of British Industry, the British Chamber of Commerce and the British Property Federation, the policy is ‘illegal' and would leave firms overpaying on their rates bills.

The bodies claim what constitutes ‘reasonable professional judgement' is not properly defined within the regulations.

Head of ratings at Daniel Watney LLP, Debbie Warwick, said: ‘At a point when hard-pressed businesses are keeping our economy moving, this change is not just morally but legally wrong. It's the equivalent of making it illegal to challenge an incorrect income tax bill.'