Business Rates Flashcards
What is a business rate?
A form of taxation on the occupation of a non-domestic property
What 4 factors determine rateable occupation?
BEAT
Beneficial
Exclusive
Actual
Transient (not too)
What is a hereditament?
A single unit of rateable assessment that is shown as a single/separate entry in the rating list
What six rules satisfy a hereditament
GROUBD
(Single) Geographical location
(Single) Rateable Occupation
(Separate) Occupation
(In a) Billing Authority
(Single) Definable position
What is a rateable value?
The amount equal to the rent at which a hereditament is estimated to be let for on a year to year basis from the antecedent valuation date
What are the seven hypothetical assumptions for rateable value
Vacant
To let
In a state of reasonable repair
FRI terms
Tenant pays rates
Current use
No alterations made
What types of relief are available?
Small business rates relief
Transitional relief
Empty property rates relief
Charitable relief
Retail Hospitality and Leisure relief
Rural relief
What methods of valuation are used in rating
Comparable
Profits
Contractors
Tell me about any rating legislations
Rating Valuation Act 1999. The act amends the Local Government Finance Act 1988 and states that any property in England and Wales that is subjected to pay non-domestic rates is valued to do so on the assumption that the property is in a state of repair
Tell me about RICS guidance on rating
Rating Consultancy Code of Practice (2017) 5th edition. It sets out advice surveyors must follow where they are seeking instruction or where they have been approached by a client to provide advice with regards to rating
Newbigin v Monk (2015)
Case regarding a large office in Sunderland. One the valuation date, the ratepayer was in the midst of redevelopment so the RV was set to £0. The court argued that the building works were repairs so the original RV should apply. In 2017 the Supreme Court overturned this ruling and held that properties undergoing redevelopment should be exempt from rates while the property is unusable
Woolway v Mazars (2015)
Mazars occupied floors 2 and 6 of Tower Bridge House. Prior to this case, unless parts of a property occupied by a ratepayer were contiguous, they were considered as separate hereditaments. The exemption was if they were shown to be functionally essential to one another so were connected via common part. The court a rules that such hereditament should be valued separately so the VOA went ahead to split all assessments that were only connected via common part
What happened as a result of Woolway v Mazars?
PICO (Property In Common Occupation) Act and Council Tax (Empty Dwellings) Act. Came into effect in November 2018 and allowed contiguous properties to be treated as a single hereditament. Hereditament that were split as a result of Mazars ruling could apply to be treated as one
What is a recent case you are aware of?
Bunyan v Acenden (2023)
Ascot House was leased in 2011 for £1.1m pa. They spent approx. £3.4m on fit out. The VTE valued it at £810k but the VOA valued it at £1m. The experts disagreed with valuing tenants fit out works. The VTE decision was overturned and the RV of Ascot House was set to £1m with effect from 01/04/2017
What business rates support was provided through Covid-19?
100% retail and hospitality relief from 1st April 2020
Small business grants of £10,000 for those with RV’s up to £15,000
