APC - Local Taxation Flashcards
What legislation governs rating?
Local government finance act 1988
General rates act 1967
NDR alterations 2009
Rating reforms act 2023
CRCA 2005
Vte procedure regs 2009
What is a rating list?
A list of properties that is compiled by a VO. (It is used by a billing authority to calculate the amountof non-domestic rates that are payable).
What is business rates?
Tax on occupation not ownership. Tax on land and buildings unless exempt or domestic
Definition of RV?
Estimated amount of annual rental income expected to be achieved vacant to let in the open market based on x3 stat assumptions
When valuing for local tax what assumptions are made?
LGFA 1988 sched 6
1) tenancy begins on day determination is made (AVD)
2) reasonable state of repair apart from those deemed uneconomical
3) lease agreed on FRI basis
What do we consider at AVD
Date non physical factors are taken into account (2 years prior to compiled list)
Rental values
Economy
Law etc
What is material date?
Day which has regard to any physical matters such as
Size, construction, use ..basically anything on MCC
What is the effective date?
Not to be confused with material date; date when rating list starts, stops or amended
What is the appeals process for business rates?
Check - confirm FACTUAL survey details (12mth deadline, 4mth from DN to lodge CHG)
Challenge - dispute VALUATION matters (18mth deadline, 4 mth from DN to lodge appeal
Appeal - disagree with CHG can go to appeal. Fees; small proposer £150 otherwise £300
If not resolved at appeal can go to
Upper lands tribunal
Court of appeal
Supreme Court
What is the current AVD?
01 Apr 2021
Where might I find the definition of RV
LGFA 1988 Schedule 6
What is a hereditement?
LGFA 1988 s 42
A relevant non domestic property
GR Act 1967 s 115
A property which is classed or likely to be entered into the rating list as a separate unit of assessment
Why was CCA introduced?
Reformed appeal system to make it more efficient
Ensures factual details are dealt with early on the process by requesting details upfront
What is the CCA proccess
Legal provision, which allows IP or agents to contend the accuracy of the rating list, factual information, or levels of value for their rating assessment
Is there any caselaw regarding a heraditament?
GILBERT V HIKINSBOTTOM & SONS 1956 6 Rules
1) be within 1 pr more BA area
2) have a single rateable occupier
3) capable of separate occupation
4) single geographical location
5) used for single purpose/use
6) have a single definable position
Explain geographical location
GEOGRAPHIC TEST
Must be direct communication between 2 parts
FUNCTIONIAL TEST
even if above test fails if both oarcles of land cannot be used independently its called one geo location
MAZARS introduced req. For floors to intercommunicate. PICO 2018 repealed and confirmed so long as floor plates touch it is sufficient
Tell me about Woolway v Mazars 2015
Tower Bridge House London (8 stories). Mazarin occupied floors 2&6. In February 2010, we sought to merge together in addition to 10% frag allowance. Note: This would result in quantum reduction
VO contended it failed contiguety.
VTE agreed to IP on basis as classing voids as one big connection. Awarded 5% allowance
UT confirmed the decision but removed the allowance
SUPREME COURT reversed tribunal decision in agreement with VO on basis of not being contiguous primarily bc it lacks INTERCOMMUNICATION
PICO reversed intercommunication requirements and instead confirmed as long as floor plates touch they are classed as contiguous
What is PICO 2018
Property in common occupation 2018 3 rules for contiguety
1. Single use
2. Single ratable occupier
3. Contiguous as in floor plates touch
No requirement to intercommunicate
Took effect from April 2010 in England and in Wales from April 2024
What is the main difference between pico and mazars
Mazarin requires intercommunication between floors PICO does not. This means 2 floors which are accessed via corridor can be classified as continiguous if floor plates touch
How does contiguity work for empty property?
Prev occ contiguous property will continue to be one assessment if becomes empty on same day. If parts vacated on separate days then individual assessments will apply
What are the 4 tenants of ratability?
JOHN LAING AND SON V KINGSWOOD 1949
ABET principles
ACTUAL- occupier must physically occupy the hereditement or physically control the site. Caselaw; Tomlin v WCC 1990 squatters liable
BENEFICIAL - Has the ability to offer level of benefit to hypothetical tenant. Eg. School makes no profit still ratable due to hypothetical benefit to tenant. Caselaw; Lambeth overseers v LCC 1897 Park held into perpetuity to public could never have benefits to hypothetical tenant
EXCLUSIVE- leading case Westminster CC v Southern railway 1936 question not who was in paramount ctrl of station but who was in paramount ctrl of part Let out. Also yoy can have x2 exclusive uses on land which are separately rateable
TRANSIENCE- must be degree of permanence. Used to be 12 months. Since Hampton v Lewis now based on intensity of use
What are Chattels
Movable objects, if enjoyed together with land and have a sufficient degree of permanence can become rateable for e.g caravan, portacabin, floating restaurants.
Caselaw: RUDD VO v Cinderella 2003 ferry converted into nightclub was rateable
What is an MCC
Under NDR alterations 2009 reg 4
IP can appeal inaccuracies of list by reason of MCC on compiled list date or thereafter based on 6 grounds
Matters affecting;
1. Physical state/enjoyment
2. Mode or category of occupation
3. Quantity of mineral or substance extracted from hereditement
4. Quantity of refuse or waste material deposited with degree of permanence on the hereditement
5. Physical state of locality
6. Use or occupation of other premises situated in locality
Note: NDR 2023 mandates if changes due to legislation/rules etc cannot appeal
What does it mean vacant to let?
To encourage uniformity in valuation, all hereditaments are assumed to be
vacant and available to let on the statutory terms of the hypothetical tenancy.
This means the actual occupier and landlord are disregarded so their particular
attitudes, needs or concerns are not taken into account in the valuation.
What are the grounds for proposals?
MERCCD VP
1.MCC
2. eff date wrong
3. Recon
4. Removed or added to list
5. Change made by vo which is wrong
6. Compiled list error
7. Domestic or exempt
8. Vt decision
9. P&M change
What property might be exempt from rating?
LHFA 1988 SCH. 5
Agricultural land and buildings
Fish farms
Places of worship 1. Open invitation 2. Church of England certified. Caselaw church of Scientology 2023
Parks - Lambeth overseers v LCC 1897 free open access managed by LA. Ancillary to park if enhances enjoyment
Disabled - must be for training or keeping disability occupants occupied not for hospitals
Light houses
Visiting forces
What property might receive rating relief?
ELS CTEI
- EMPTY BULDING ‘ 100% relief on vacant properties for 3 months and 6 months relief for industrial. (From Apr 24 must be re’occupied for 13 weeks
- LISTED BUILDINGS- 100% relief until re-occupied
- SBRR - 100% relief for RV of 12k or less. Relief phased from £12,001 to 15k. Must occ one property in UK
- CHARITABLE - 80% if used for charitable purposes
- TRANSITIONAL RELEIF- protect IP from large increase or decrease in their rating liability between valuations. From 2023 only for increase
- ENTERPRISE ZONE RELEIF - If starting up or moving to Enterprise zone can get up to 55k over 5 years
- IMPROVEMENT RELEIF - if area has been increase, efficiency or p&m improved and certified that occ has been in occ for duration of works by ba then eligible
SMALL BUSSINESS SUPPORT RELEIF - No increase of more than £600
Sec 44a building ot occupied following redevelopment Council can award discretionary relief for short terms
Retail relief 75% expire in Apr 2025. Reduced thereafter to 40% (Oct 24 budget).
What is Rebus Sic Stantibus?
Latin; taking things as they stand.
This means we value things as they stand at the material date based in two separate limbs:
PHYSICAL LIMB
Using reasonable personal test we only have regard for minor changes/alterations. We do not have regard for hope value. I.e stud wall in zoned shop, zone straight through as a reasonable person would remove at little cost. This would not be the case with structural wall.
USE LIMB
Using principle characteristics use test, must value property for same general purpose as existing use of the hereditement in the open market. Value attributable to the prospect of using for different purpose must be disregarded I.e if u have parade of shops at 10k and subject could be used as restaurant and value at 15k we value based on existing use
X2 caselaw
FIR MILL V ROYSTON 1960
held cotton mill valued as factory ragter than a cotton mill. A factory is a factory and a shop is a shop
SCOTTISH &NEWCASTLE V WILLIAMS 2000
Confirmed we assess mode and category based on 2 limbs of Rebus separately. Case was public house in parade of shops. Decision to value on existing use as public house
What is FRI and IRI lease?
FRI
Full repair and insure liability on tenant
IRI
Internal repair and insure liability on tenant
What is the central rating list?
Contains assessments of major transport, utility, and communications such as gas, water, railways etc
How is property in Central list valued and paid?
Single totalled RV for all property occupied by ratepayer.
Paid direct to dept. for levelling up.
Where is the central list located?
Gov uk website
Do you know any caselaw in respect of weighting/hierarchy of evidence?
LOTUS AND DELTA V CULVERWELL AND LCC 1976
6 STAGES
1. The rent of the subject should be taken as a starting point
2. Closer the rent is to rating hypothethesis and the AVD, the more weight should be attached to it
3. Where rents of similar properties are available, they should be looked at.
4. Assessments of other comparable Assessments are also relevant
5. In light of all of the evidence obtained, an opinion can be formed.
6. Where no comparable rents are available a review of other Assessments may be helpful.
SPECIAL EYES V FELDGATE 1994
rental evidence 86/87 helpful in determining upwards trend. But had little weight due to required adjustments to 1/4/88
Rental evidence close to AVD has biggest weighting due to requiring no adjustments
Rental evidence post avd admissible but preferably not ot used
What can you tell me about establishment of tone
OBRIEN V HARWOOD 2003
3 stages leading to establishment of tone
- New rating list, entries carry little weight due to being uncontested.
- Over time assetments will be challenged or agreed
- Finally a stage is reached where anought assetments have been agreed or determined or are unchallenged to establish a pattern of values, a tone of the list
What items of P&M are rateable?
P&M regs 2000
P&M rateable bc it’s like chattel and enjoyed with land
POWER
Anything that creates, contains or maintains power. E.g air compressor, generators etc. Valued on cost guide. If for grid valued on central list
SERVICES
Heating/cooling, fire protection and security. Reflected in base price
MOVEMENT
Lifts/ elevators. Rejected in base price
STRUCTURE
Bund walls, pits and tanks. If less than 400 cubic meters and movable without need for demolition ie not permanent its not rateable. Valued on contractors basis.
Aircon reflected as other addition
Retail ac £7 p.s office £4 pms
Iceland v woodberry 2018 ac exclusively used for services of hereditement therfore not rateable.
Why do we have an avd and not just value at eff date?
Go e VO time to produce and update list.
What rental adjustments would you make?
- Stepped rent/ r/f period
- Vat
- Premiums/reverse premiums
- Other adjustments such as living accommodation or overage
- Break clauses
- Tenant alterations/improvements
What is the uniform business fates multiplier?
UBR set by government.
Since 24/25
Below 51k is 49.9 pence
Over 51 k is 54.6 pence
What can you tell me about me about allowances?
Allowances are made for e.g masking or irregularities falling beyond the scope of the scheme.
However two peices of caselaw.are relevant
1) occ v struder unreasonable to assume allowance from one property should automatically apply another
2) onus on appellant to demonstrate allowance from comp is applicable to subject
Who deals with appeals?
England
Judicial arm: VTE valuation tribunal for England
Administrative arm VTS valuation tribunal service
