Local Taxation Flashcards
What was the first piece of legislation which encompassed Rating?
Poor Relief Act 1601
What is the main piece of legislation which encompasses Rating today?
The Local Government Finance Act 1988 (Non Domestic Rating Multipliers) (England)
What piece of legislation did the Local Government Finance Act 1988 replace?
General Rate Act 1967
What Schedule within the Local Government Finance Act 1988 provides the basis of Rateable Value?
Schedule 6
What piece of legislation determines the alteration of the Rating List?
The Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009
What Schedule within the Local Government Finance Act 1988 covers exemptions from Rating
Schedule 5
Is Non-Domestic Rating a tax on Occupation or Ownership?
Occupation
What are the four tenets for considering rateable occupation?
- Actual
- Beneficial
- Exclusive
- Transcience
What is the Case Law that covered the four tenets of rateable occupation?
John Laing & Son v Kingswood Assessment Committee and Others (1948)
What do the four tenets of rateable occupation mean?
Actual - Occupier needs to be physically present. Intention to occupy cannot be regarded as evidence of Occupation. (Actually needs to be an Occupier present)
Beneficial - Occupation needs to be of benefit or value to an Occupier - and doesn’t have to be monetary
Exclusive - Exclusivity determines that there can only be on rateable occupier for a particular purpose. If there is more than one occupier for a particular purpose, one of the Occupiers needs to have paramount control
Transient - There must be a degree of permanence. Builder huts for 6/7 months isn’t rateable, but gravel pits beside a motorway less than 12 months as the use was so intense. Intensity of use and change of land over period is a factor of transience.
What does “Rebus sic stantibus” mean?
To be valued as it stands for rating purposes.
What are the two limbs of “Rebus sic stantibus” and what do they mean?
Physical - The hereditament must always be valued as it stands in it’s actual physical state.
The question is, what alterations is it permissible to envisage an incoming tenant would reflect in the rental bid? ‘The cortect approach is to look at the totality of the works in the context of the hereditament and then ask the question: are those works minor? It is essentially a matter of impression and common sense: would a reasonable man, looking at the hereditament as it stands at the material date and the proposed alterations, describe those alterations as minor?”
Use - It is clear, reading the Lands Tribunal decision as a whole that it intended to provide a practical approach to valuation in line with its interpretation of the law. The decision refers several times to the Fir Mill test with approval, “a dwelling-house must be assessed as a dwelling-house; a shop as a shop, but not as any particular kind of shop; a factory as a factory but not as any particular kind of factory”, and in its summary at para 198(b) the Tribunal refers to “shops, offices and factories” serving as examples of modes or categories of use having regard to the “principal characteristics of use”
What are some property types which may be exempt from Rating (as per Schedule
5 of the LGFA 1988?)
- Agricultural buildings (including fish farms)
- Buildings used for the training or welfare of disabled people
- Building registered for public religious workshop or church halls
- National parks
What is small business rates relief?
Small business rates is where a property with a Rateable Value of £51,000 is eligible for some relief.
- If the RV is less than £51,000 then the small business rates UBR multiplier is used (0.499)
- If the RV is less than £12,000, then the property is automatically entitled to full 100% business rates relief
- If the RV is between £12,000 and £15,000 the relief is calculated on a slider from 100% to 0%. Eg if the property has an RV of £13,500, it will receive 50% rates relief
What is rural rates relief?
This is a form of relief available if a business is in a rural area with a population of below 3,000
What is charitable rates relief?
Charities and community amateur sports clubs can apply for charitable rate relief of up to 80% if a property is used for charitable purposes (and can be topped ip to 100% as discretional relief at the discretion of the billing authority)
What is Enterprise Zone relief?
Relief rates vary depending on the Zone
What is Hardship relief?
In England, councils can offer hardship relief if a business would be in financial difficulties without it and it is in the interests of local people
What is empty building rates relief? (Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008
- Buildings are zero rated for the first 3 months of being empty, with industrials being 6 months
- Listed buildings are zero rated until occupied, as are buildings with an RV below £2,900 until they’re reoccupied
- Properties owned by charities or community amateur sports clubs are zero rated whilst empty, but only if the property’s next use will be mostly for the same purpose.
What is Transitional relief?
This is a scheme set up which allows the VOA to issue Transitional certificates which informs the relevant billing authority what the RV would be were it possible to amend the Rating List.
This scheme also allows an increased and decreased phasing in Rateable Values between lists if there’s an increase or decrease. This means if there’s an increase, the Ratepayer has time to get used to this, and if there is a decrease then the BA won’t have to fork out the decrease money all in one go
Where can the VO’s statutory duties be found within the LGFA 1988?
Section 41.1 (1) LGFA 1988
What is the VO’s statutory duty?
‘The valuation officer for a billing authority shall compile, and then maintain, lists for the authority (to be called its local non-domestic rating lists).’
What part of the LGFA 1988 about the ‘Empty Property Rate’ introduced in 1966?
Section 45(1) - the owner then becomes rateable in respect of an unoccupied hereditament
What is the legislation that is in relation to Transitional Relief?
The Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016 SI No 1265
What are the different Regulations in relation to Transitional Relief for the 2017 Rating List?
- Regulation 14
- Regulation 15
- Regulation 16
- Regulation 17
- Regulation 18
- Schedule 1
- Schedule 2
- Section 20
Which piece of legislation covers that adjustment for repairs should be dealt with last?
F W Woolworth and Co Ltd v Peck (VO) 1967 LT RA 365
What is the legislation which encompasses how Plant & Machinery is rated in England?
The Valuation for Rating ( Plant and Machinery ) ( England ) Regulations 2000
What are the 4 classes for Plant & Machinery?
Class 1 - Power
Class 2 - Services
Class 3 - Transport
Class 4 - Structures
If Plant & Machinery is present in a hereditament, is it included or excluded in the Valuation?
Plant and machinery will be valued as part of a hereditament if it is included within the current P&M regulations?
What is the name of the legislation and regulations for the 2017 Rating List which encompasses Check, Challenge and Appeal?
- The Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2017
- The Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) (Amendment) Regulations 2017
What is the statutory definition of Rateable Value?
The rateable value of a non-domestic hereditament (none of which consists of domestic property and none of which is exempt from local non-domestic rating) shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year on the three assumptions:
- The tenancy begins on the day by reference to which the determination is to be made
- Before the tenancy begins the hereditament is in a reasonable state of repair (but excluding any repairs which a reasonable Landlord would consider uneconomic)
- The Tenant undertakes to pay all usual Tenant’s rates and taxes and to bear the cost of the repairs and insurance and the other expenses necessary to maintain the hereditament in a state to command the rent.
What does Section 41 of the LGFA 1988 state?
The Valuation Officer for a Billing Authority shall compile, and then maintain, lists for the authority to be called it’s local non-domestic Rating Lists
What is the definition of a non-domestic hereditament and what section of the LGFA 1988 can it be found?
- Section 64
- A hereditament is anything which, by virtue of the definition in Section 115(1) of the 1967 Act, would have been a hereditament for the purposes of that Act had this Act not been passed
What is the Material Day when considering a Material Change in Circumstances?
The day the Check is submitted
Where can the Mention Matters I.e. things to be taken at the Material Day, be found?
LGFA 1988 Schedule 6 para 2(7)
What currently (2022) are the 2 leading cases on MCCs?
- Merlin Entertainment v Cox (VO)
- Wigan Athletic FC v Cox (VO)
What is the Check, Challenge and Appeal process?
- System introduced for the 2017 Rating List - more cohesive ways of processing Rating List changes, where there must be evidence and solid grounds - helped to reduce the number of speculative appeals
Check - Relevant facts are validated by the Ratepayer - establishes the physical facts of the property
Challenge - Allows the Ratepayer to Challenge the Rating List entry (including decisions at Check)
Appeal - Allows the Ratepayer to appeal to the independent Valuation Tribunal for England
What legislation regulates Council Tax?
Local Government Finance Act 1992
What is the Antecedent Valuation Date for Council Tax in England?
1st April 1991
What date did Council Tax come in to effect in England?
1st April 1993
What factors help determine what Council Tax band a domestic dwelling falls in to?
- Size
- Layout
- Character
- Location
- Change of use
How many Council Tax bands are there in England?
8, Bands A to H
How many Council Tax bands are there in Wales?
9, A to I
What are the Council Tax Band values in England?
Band A: Up to £40,000
Band B: £40,001 to £52,000
Band C: £52,001 to £68,000
Band D: £68,001 to £88,000
Band E: £88,001 to £120,000
Band F: £120,001 to £160,000
Band G: £160,001 to £320,000
Band H: More than £320,000
What are the Council Tax Bands for Wales?
Band A: Up to £44,000
Band B: £44,001 to £65,000
Band C: £65,001 to £91,000
Band D: £91,001 to £123,000
Band E: £123,001 to £162,000
Band F: £162,001 to £223,000
Band G: £223,001 to £324,000
Band H: £324,001 to £424,000
Band I: More than £424,000
What is the Council Tax Antecedent Valuation Date for Wales?
1 April 2003
What did the Woolway (VO) v Mazars LLP (2015) Supreme Court decision entail?
Mazars occupied Floors 2 and 6 of Tower Bridge House and sought to have their assessments merged, however the Supreme Court ruled that the VOA had to reconsider how properties where Occupiers use two or more separated space within a building are valued.
What did the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018 entail?
This was legislation introduced by Central Government which overturned the Woolway v Mazars ruling - for NDR it amended s.64 for the definition of a hereditament and allowed hereditaments which are “contiguous” (physically touching/same use etc) can be classed as one hereditament.
What does the Case Law Lotus & Delta Ltd v Culverwell (VO) and Leicester City Council (1976) detail?
The case established the procedure for considering evidence and created the ‘hierarchy of evidence’
What are the 6 Propositions detailed in Lotus & Delta?
- The subject property rent should be taken as a starting point
- The more closely the circumstances under which the rent was agreed in relation to the statutory requirements of the definition of RV, the more weight should be attached to it
- Where rents of similar properties are available, they too are properly looked at through the eye of the Valuer in order to confirm the level of value indicated by the actual rent of the subject hereditament
- Assessments of other comparable properties are also relevant. These should be taken as indicating comparative value and indication of that opinion
- In light of all the evidence, an opinion can be formed of the value of the hereditament and the weight attributed to the different types of evidence depending on the nature of the actual rent and the degree of comparability found in other properties.
- In the cases where there are no rents available of comparable properties, a review of other assessments may be helpful, but in such circumstances it would be more difficult to reject the evidence of the actual rent.
What happened in the Appeal of Ebury (2003)?
This was to do with the alteration of the Rating List - where the VO had made an alteration to the RV but the Tribunal upheld that the Appeal could still go ahead despite the change to the RV by the VOA
What happened in the Cardtronics and Others v Sykes and others (VO) case?
ATMs - This was to decide whether ATMs should be assessed separately because the ATMs were owned by other companies but were occupied within another’s space (eg Supermarkets)
It was ruled they should NOT be separately assessed
What happened during the Garton v Hunter (VO) Case?
All evidence is admissible
It was ruled that all evidence is admissible however weight should be attributed to the evidence which is submitted?
What happened during the Gilbert v Hickinbottom case?
This was to do with premises on opposite sides of a highway (bakery and repair depot) - and whether one or two hereditaments were functionally essential
Lands Tribunal decision to treat as one hereditament upheld - Tribunal had committed no error of law (this was then overturned by Mazars SC decision)
What happened during the Gilmore v Baker-Carr Case?
This case was to do with agricultural exemption - and whether used solely in connection with agricultural operations on the land
What happened during the Ladies Hosiery and Underwear Ltd v Assessment Committee for the West Middlesex Assessment Area case?
Correctness must not be sacrificed for uniformity
What happened during the Merlin Entertainments Group Ltd v Cox case?
Ride crash at Alton Towers that led to increased football was not physically manifest at the Material Day - upheld that there was no MCC, not physical and was an economic issue
What happened during the Newbigin v Monk case?
Offices undergoing refurbishment, incapable of beneficial occupation, repair assumption not applicable, and therefore we must value in its current state of disrepair
What happened during the O’brien v Harwood case?
Assessed whether the LGFA was compatible with the Human Rights convention and establishing the Tone of the List
What happened during the Specialeyes v Felgate (VO) case?
This attributed the weight to be given to post AVD rents in a rapidly moving market
What happened during the Wigan FC Ltd v Cox (VO) case?
Football is football, relegation is not an MCC as it’s an economic and not a physical issue
What happened during the Iceland Foods Limited v Jane A Berry (VO) case?
This was about whether air handling equipment like air conditioning for keeping freezers cool was P&M that should be taken into account in the Valuation. Determined that it should not.
Can you name the different types of relief available?
Transitional Relief, Rural Rate Relief, Small Business Rates Relief, Enterprise Zone Relief, Local Newspaper Relief (seen as an essential service integral to society)
Where can you find the Effective Date regulations?
The Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2017. Regulation 14 provides details on the Date of Schedule, and when you can/cannot back date from
What is the main case law in relation to Mode and Category of Occupation?
City Duck case - Scottish & Newcastle Retail Ltd v Williams (VO) (2000)
What Council Tax band would you be in? £69,000
Band D
What is a Landlord’s and Tenant’s interest commonly referred to as?
Landlord - Term. Tenant - Reversion.
What is in a lease?
- Term (number of years) 2. Deed (legal document) 3. Exclusive Possession 4. Reversion (Freehold Interest)
A Lease is divided into six parts - what are they?
- Premise 2. Rent (Commencement Date) - Reddendum 3. Term (Demised Areas) - Addendum 4. Address 5. Covenants 6. Conditions
In what circumstance would an owner want to increase their assessment?
Compensation claim based on RV - Landlord and Tenant Act 1954
What are the different costs for a VT appeal?
£300, or £150 if the IP is a Small Proposer. This money is refunded is the appeal is allowed.
When dealing with a Rating Assessment, do you take into account Tenant’s Improvements?
Yes - refer to Landlord and Tenant Act 1927 which covers tenant’s improvements. Must be stripped from rent.
What is the leading case law on repair and beneficial occupation?
Jackson (VO) v Canary Wharf LTD (2019)
What Council Tax would you be in - £125k?
Band F
What is the Material Day?
The day in which we take into account the physical factors that affect value, such as age, size, construction etc..
What is the Antecedent Valuation Date?
They day in which we take into account the non-physical factors that affect value, such as rental values. The AVD for the 2017 Rating List is 1st April 2015 (two years before start of Rating List - 2017 RL - 1st April 2017)
Please can you name some exemptions from Schedule 5 of the Local Government and Finance Act 1988?
Places of Public Religious Worship - (Church of Scientology v Ricketts (VO) 2021, Agriculture, Parks, Disability, Sewage
What Section of the Local Government and Finance Act 1988 concerns Reliefs?
Section 44
Who actions Reliefs?
The Billing Authority
What does PICO stand for?
Properties in Common Occupation
What is the main piece of legislation concerning “contiguity”
Woolway v Mazars (2015)
What does contiguous mean?
Next to/touching
What are the major differences between a lease and a licence?
- Estate in Land 2. Exclusive Possession. 3. Assignment
What is the case law on the differentiation between a lease and a licence?
Street v Mountford
Who are the Public Sector Bodies responsible for maintaining RV across the UK?
VOA - England and Wales. Scottish Assessors - Scotland. Land and Property Services Department - Northern Ireland
What is the leading case law concerning AVD?
K Shoe Shops LTD v Hardy - stated the valuation list should reflect current & up to date rental values
Why may a Challenge case be considered invalid?
Not served by IP, served after statutory deadline, no details of Challenge, Challenge previously submitted on same grounds
What Council Tax Band would you be in? £70k
Band D
What are Council Tax valuations based on?
Values are based on the price the property would have sold for on the open market on 1 April 1991 in England
When did the Council Tax list first come into effect for England?
1993
