Local Tax

Question 1

What is the definition of Rateable Value?

Answer 1

Rateable value is the estimated rent a property would achieve on a year-to-year tenancy, assuming a good state of repair, with the tenant covering all costs.

Question 2

What is the UBR?

Answer 2

Uniform Business Rate (UBR) for 2024-2025 is 54.6 pence (standard) and 49.9 pence (small business).

Question 3

Can the UBR change?

Answer 3

Yes, the UBR can change based on inflation.

Question 4

What is the AVD of the new Rating list?

Answer 4

The current list has an AVD of 01/04/2015.

Question 5

Why do we have an AVD?

Answer 5

AVD ensures uniformity in property valuations, to avoid inconsistencies due to inflation, as seen in K Shoes case.

Question 6

What options does an owner have if the upper floor of a shop is unused?

Answer 6

The owner can apply for a section 44a notice to apportion RV to the used part or take steps to make it separately lettable.

Question 7

What is a section 44a?

Answer 7

A notice that apportions rateable value to the occupied portion of a property.

Question 8

If a S.44 was granted how would this work?

Answer 8

The occupier applies to the BA, who refers it to the VO for assessment and apportionment. No appeal is allowed, and the notice lasts for a limited time.

Question 9

What are the main changes that came into rating in 1999?

Answer 9

The definition of RV was changed to assume a property is in reasonable repair following the Anston v Benjamin case.

Question 10

What is a composite hereditament?

Answer 10

A property that is both domestic and non-domestic, such as a shop with living accommodations.

Question 11

What is transitional relief?

Answer 11

Relief that eases the impact of RV changes between rating lists, applied both upwards and downwards.

Question 12

What is small business rates relief?

Answer 12

Small business rates relief reduces rates for properties under £15,000 RV. 100% relief applies to properties under £12,000, with sliding relief for those up to £15,000.

Question 13

How would you verify information on a form of return?

Answer 13

Cross-check against nearby properties, contact the ratepayer or landlord’s agent.

Question 14

What is Rebus?

Answer 14

Valuing the property in its current mode or category of use and physical state, with only minor physical changes considered.

Question 15

What is a hereditament?

Answer 15

A unit of assessment that appears as a separate entry in the rating list.

Question 16

If two properties were owned by the same company but separated by a road what would I do?

Answer 16

Assess whether the properties are functionally essential to each other, using Gilbert v Hickenbottom as guidance.

Question 17

What are the 4 essential ingredients to rateable occupation?

Answer 17

Actual, beneficial, exclusive, and non-transient occupation.

Question 18

What do you understand by not too transient?

Answer 18

Occupation must not be too short-term to be deemed rateable.

Question 19

Are certain properties exempt from rating?

Answer 19

Yes, including agricultural land, religious worship places, and more, listed under Schedule 5 of the LGFA 1988.

Question 20

Would a church hall be exempt?

Answer 20

Yes, but only if it is used in connection with public religious worship.

Question 21

What statute reflects disrepair?

Answer 21

Rating (Valuation) Act 1999.

Question 22

How do you deal with repair?

Answer 22

Assume the property is in good repair unless the disrepair is uneconomic to fix.

Question 23

Is it difficult for a ratepayer to get a property taken out of the list?

Answer 23

It can be challenging unless the property is in significant disrepair that is uneconomic to repair.

Question 24

Can you give me some case law relating to repair?

Answer 24

Benjamin (VO) v Anston Properties.

Question 25

If the property is empty is it liable for rates?

Answer 25

Properties are exempt from rates for 3 months, with an additional 3 months for industrial properties. Listed buildings are exempt until re-occupied.

Question 26

Is there anything significant about empty property rates and listed buildings?

Answer 26

Listed buildings are exempt from empty property rates until next occupied.

Question 27

What are people doing to avoid EPR?

Answer 27

Occupy the property for a short period or have charities occupy to minimize rates.

Question 28

What is an MCC?

Answer 28

Material Change of Circumstances, affecting the physical state or locality of the property.

Question 29

What would cause an MCC?

Answer 29

Roadworks, a new competitor nearby, or closure of a car park could cause an MCC.

Question 30

How would you assess a reduction?

Answer 30

Assess the loss in trade or access caused by the MCC.

Question 31

What would be the reduction if the road was closed?

Answer 31

If the road closure prevents all access, the property may be removed from the rating list.

Question 32

What if next door was demolished, is it an MCC?

Answer 32

It could be if the demolition caused noise or other disturbances.

Question 33

A retailer in a shopping centre vacates a unit - is this an MCC?

Answer 33

It depends on the impact on footfall, especially if an anchor tenant leaves.

Question 34

What if I appealed for road works one week after they were completed?

Answer 34

Proposals must be submitted during the works; post-completion appeals would not be valid.

Question 35

What methods of valuation do you use in rating?

Answer 35

Comparable method, receipts and expenditure method, and Contractors test.

Question 36

Where would you look for comparables in a rating valuation?

Answer 36

Search the VOA database or private company databases for rental information from appeals, rent reviews, or new lettings.

Question 37

What other features might you reflect when valuing a shop for rating purposes?

Answer 37

Size, location, layout, accessibility to all floors, frontage, and window display space.

Question 38

Explain how you would do a contractors valuation for a rating valuation?

Answer 38

Follow the five steps: estimate cost of construction, adjust for obsolescence, estimate land value, apply the decap rate, and stand back and look.

Question 39

Where do your build costs come from?

Answer 39

VOA’s cost guide, which provides Estimated Replacement Cost per square meter, adjusted for location, size, and fees.

Question 40

If you were in private practice how would you source build costs?

Answer 40

Private practice sources include BCIS, Spons, or actual project build costs.

Question 41

How is age and obsolescence calculated?

Answer 41

Physical obsolescence is calculated using scales published by the VOA, and functional obsolescence may already be reflected if modern replacement costs are used.

Question 42

What is the location factor based upon?

Answer 42

It is based on actual build cost analysis, reflecting regional variations.

Question 43

What about external works?

Answer 43

External works should be costed separately at Stage 1 of the contractor’s method.

Question 44

What about land values?

Answer 44

Land values come from comparable evidence of similar properties in the locality.

Question 45

What if there isn’t any comparable sales evidence for land values?

Answer 45

Use sales of land in other categories and adjust or apply a percentage of build costs agreed upon.

Question 46

What is the statutory decap rate for schools?

Answer 46

For 2017: 2.6% for schools and health; 4.4% for others.

Question 47

Why is it different for schools/health?

Answer 47

Educational and health properties are government-funded and thus borrow at lower rates.

Question 48

How are hotels valued for rating purposes?

Answer 48

Small hotels are valued comparably by bed space, while large hotels use the shortened receipts and expenditure method.

Question 49

How would you adjust for a rent free period?

Answer 49

Amortize the rent-free period value over the period to the next rent review using YP and PV tables.

Question 50

Does a tone get greater during the lifetime of a list?

Answer 50

No, it becomes more established through additional evidence.

Question 51

What reasons would you give an end allowance?

Answer 51

For unique features not accounted for in the psm price, e.g., masking, unless all comparables had similar conditions.

Question 52

Why would you use a 5% adjustment for external repairs?

Answer 52

5% is the accepted industry standard, based on historical analysis of repairs.

Question 53

How would you value a compressor?

Answer 53

A compressor is valued using the contractor’s method, with a 5% decap rate.

Question 54

How would you make an allowance for age?

Answer 54

Age is typically reflected in rental comparables, or a percentage adjustment is derived from comparable rental evidence.

Question 55

LGFA 1992 - what are the provisions?

Answer 55

Council tax provisions, delegating authority to the VOA to create and maintain the council tax list.

Question 56

Plant and Machinery - what statute governs this?

Answer 56

Valuation for Plant and Machinery Regulations 2010, derived from the Wood committee’s recommendations.

Question 57

What are the four classes of plant and machinery?

Answer 57

Power, service, movement, named structures.

Question 58

How do you value P and M?

Answer 58

P&M is valued by the contractor’s method or per sq meter for items like air conditioning.

Question 59

RICS Code of practice ‘Rating Consultancy’ - what are the main points?

Answer 59

Ensure client is aware of services, fees, and terms of engagement; avoid contingency fees to maintain impartiality.

Question 60

What is zoning?

Answer 60

A method of measurement that compares properties based on ‘in terms of zone A’.

Question 61

Why is it used?

Answer 61

It allows properties of varying shapes and sizes to be compared.

Question 62

Is it a method of valuation?

Answer 62

No, it is a method of measurement, not valuation.

Question 63

How do you zone? What is the methodology?

Answer 63

Measure zones in 6.1m distances; Zone B is half the value of Zone A, and so on.

Question 64

How do you account for a rent free period?

Answer 64

Amortize the rent-free period and apply it over the full period to determine the rental figure.

Question 65

How do you analyse and adjust a stepped rent?

Answer 65

Amortize the rent for each ‘step’ of the lease period.

Question 66

If an appeal claims a property is uneconomic to repair what do you consider - what is the case law?

Answer 66

Consider repair costs relative to RV and the market’s demand, as seen in the Princes Street case.

Question 67

What is an expert witness?

Answer 67

An expert witness is someone who is presenting evidence to a panel in a subject that they have sufficient knowledge and experience in to be deemed an ‘expert.’ Their job is to provide factual evidence to allow others to make an informed decision, not to give an opinion on the outcome.

Question 68

How do you differentiate your roles between expert witness and advocate at VT?

Answer 68

I make it quite clear, I say ‘I am now acting as an expert witness’ or ‘I am now acting as an advocate.’

Question 69

When you are providing reasoned advice to a VT panel are you an advocate or an expert witness?

Answer 69

Reasoned advice is advice/opinion backed up by evidence, and in this case, you would be giving the advice as an expert witness.

Question 70

What is a written submission?

Answer 70

A written submission is where the appellant cannot attend the tribunal and asks for his statement of case to be treated as his submission at the VT hearing. The clerk will usually read this out.

Question 71

Lotus & Delta - tell me what this is?

Answer 71

It is a case that gives guidance on how rents on subject and comparable properties are to be treated. It lays out 6 ‘rules’ for assessing rents, including subject rent as the starting point, assessments of comparable properties, and when no rents are available, a review of other assessments.

Question 72

When are the revised VTE procedures effective from?

Answer 72

1st April 2017

Question 73

What do they apply to?

Answer 73

All appeals made or listed on or after that date.

Question 74

What are the revised procedures?

Answer 74

The parties must agree on facts and exchange valuations 10 weeks before the hearing; respondents must serve evidence 8 weeks prior, appellants must serve their full case 6 weeks prior, and final documents must be sent to the VT 2 weeks before the hearing.

Question 75

What is the Woolway case regarding?

Answer 75

Woolway v Mazars relates to offices occupied by Mazars on the 2nd and 6th floors of an office building, determining whether this formed one or two separate assessments.

Question 76

What was the outcome?

Answer 76

The Supreme Court decided that contiguous units need to be interconnected and easily accessed. Since the two floors could be let separately and were functionally independent, they were separate assessments.

Question 77

What tests are now used to determine unit of assessment?

Answer 77

Geography (must be interconnected) and functionality (functional reliance on each other).

Question 78

What is the Monk v Newbiggin case regarding?

Answer 78

It involved works on an office building being stripped back to a shell. The ratepayer argued the building should be removed from the rating list, while the VO argued the works were economic repairs.

Question 79

What was the outcome?

Answer 79

The Supreme Court agreed with the ratepayer, stating that the premises should be valued by considering the actual physical condition at the valuation date.

Question 80

What is an expert witness?

Answer 80

An expert witness is someone who is presenting evidence to a panel in a subject that they have got the sufficient knowledge and experience in to be deemed an ‘expert.’ An expert witness’ job is to provide factual evidence to allow others to make an informed decision, not to provide their opinion on the outcome.

Question 81

How do you differentiate your roles between expert witness and advocate at VT?

Answer 81

I make it quite clear, I say ‘I am now acting as an expert witness’ ‘I am now acting as an advocate.’

Question 82

When you are providing reasoned advice to a VT panel are you an advocate or an expert witness?

Answer 82

Reasoned advice is advice/opinion backed up by evidence, in this case you would be giving the advice as an expert witness.

Question 83

What is a written submission?

Answer 83

A written submission is where the appellant cannot attend the tribunal and so asks for his statement of case to be treated as his submission at the VT hearing. The clerk will usually read this out.

Question 84

Lotus & Delta - tell me what this is?

Answer 84

It is a case which gives guidance on how rents on subject and comparable properties are to be treated. It lays out 6 ‘rules’ for assessing rents: 1) Subject rent is the starting point, 2) The more this conforms to the definition of RV the more weight should be attached to it, 3) Rents of similar properties are to be looked at, 4) Assessments of other comparable properties are relevant, 5) An opinion of value can be formed, 6) Where no rents are available a review of other assessments may be helpful.

Question 85

When are the revised VTE procedures effective from?

Answer 85

1st April 2017

Question 86

What do they apply to?

Answer 86

All appeals made or listed on or after that date.

Question 87

What are the revised procedures?

Answer 87

No later than 10 weeks before the date of the hearing the parties must have discussed and agreed facts and exchanged valuations. No later than 8 weeks before the date of the hearing the respondent must serve on the appellant a copy of any regulation 17 evidence which the respondent relies. No later than 6 weeks before the date of the hearing the appellant must serve on the respondent their full case including any evidence. No later than 4 weeks before the date of the hearing the respondent must serve of the appellant their full case and any evidence. No later than 2 weeks before the date of the hearing the appellant must send these documents to the VT. This can also include a response to the respondent’s case.

Question 88

What is the Woolway case regarding?

Answer 88

Woolway v Mazars relates to offices occupied by Mazars on the 2nd and 6th floor of an office building. This case was whether this formed one or two separate assessments.

Question 89

What was the outcome?

Answer 89

This went to the Supreme Court in 2015 who decided that contiguous units need to be interconnected and easily accessed by one another. As the two floors could be let separately they were functionally independent. No exceptional factors with regard to enjoyment were present.

Question 90

What tests are now used to determine unit of assessment?

Answer 90

Geography: Must not be accessed through common parts, interconnectivity is required. Functionality: Do they have functional reliance on one another? Is one necessary for the enjoyment of the other? If not they are separate assessments.

Question 91

What is the Monk v Newbiggin case regarding?

Answer 91

This was based around works being undertaken to an office building in Sunderland. The works involved stripping the unit back to a shell prior to creating three office suites. The ratepayer argued the building should be removed from the rating list. The VO argued the works to put the property back into repair were economic and therefore it should remain in the rating list.

Question 92

What was the outcome?

Answer 92

This went to the Supreme Court who agreed with the ratepayer. The Court decided that the premises should be valued by having regard to the actual physical condition at the valuation date.

Question 93

What tests are now used to determine repair?

Answer 93

The Court put forward a 3-stage approach: 1) Consider whether the premises were actually capable of occupation in the state they existed on the assessment date, 2) If the premises were capable of occupation, consideration should be given to the mode or category of the occupation, 3) If any parts of the development are complete and capable of occupation the statutory assumption should be applied.