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APC > Local Taxation > Flashcards

Local Taxation Flashcards

1
Q

What is SDLT?

A

Stamp Duty Land Tax.

Tax you pay when buying property in England. If

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2
Q

How is SDLT calculated?

A

0% on the first £150,000
2% on the next £100,000
5% on the remaining amount (i.e. above £250,000)

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3
Q

When buying a non-residential or mixed leasehold what does SDLT include?

A
  • purchase price of the lease
  • value of the annual rent you pay (net present value NPV).
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4
Q

How is NPV calculated?

A

Based on the total rent over the life of the lease (no applicable on rent if less than £150,000).

0% up to £150,000
1% from £150,000 to £5,000,000
2% above £5,000,000

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5
Q

What are capital allowances?

A

Tax relief for businesses which let you deduct some or all of the value of an item from your profits before you pay tax.

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6
Q

What can you claim capital allowances on?

A
  • equipment
  • machinery
  • business vehicles
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7
Q

What is the RICS code of practice?

A

Rating Consultancy 4th edition March 2017 (wef April 2017)

Sets out the mandatory code of practice for firms and members

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8
Q

What is the statutory definition of ‘hereditament’ in section 115(1) of the General Rate Act 1967?

A

“such a unit of.. property which is, or would fall to be, shown as a separate item on the valuation list”

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9
Q

What case law are you aware of?

A

Woolway v Mazars

Mazars requested their offices on 2nd and 6th floors of an office block should be merged as one assessment rather than 2 separate as shown in the 2005 List. The Valuation office appealed stating it were two separate hereditaments.

The upper tribunal confirmed the premises could be treated as one hereditament. Mr Woolway appeal to the Court of Appeal (dismissed) and Supreme Court.

Decision was they are to be separate.

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10
Q

Where is the basis of valuation for non-domestic rating set out?

A

Schedule 6 to the Local Government Finance Act 1988 (as amended)

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11
Q

What does Schedule 6 to the Local Government Finance Act 1988 (as amended) state?

A

The rateable value of non-domestic hereditament “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.

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12
Q

What does AVD mean?

A

Antecedent Valuation Date

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13
Q

What is the current AVD?

A

1st April 2021

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14
Q

What is AVD?

A

The evidence available
*economic circumstances

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15
Q

What is the current Material Day?

A

1st April 2023

*The physical circumstances

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16
Q

How are public houses valued?

A

Assessing the Fair Maintainable Turnover (FMT)

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17
Q

What does FMT take into account?

A

-location
-design and character
-level of adaptation
-trading history

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18
Q

What is the General Rate Act 1967?

A

It consolidates practically the whole of statute law on rating in force at the date it was enacted, bringing into a single statute more than thirty statues from the Poor Relief Act 1601 to the Local Government Act 1966.

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19
Q

What is Hereditament?

A

Section 115(1) of General Rate Act 1967

Hereditament means property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list

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20
Q

What is the 3 principles from Woolway v Mazars case?

A
  1. Geography - “visual or cartographical unity”
  2. Functionality - do the two units have functional reliance on one another?
  3. Enjoyment - where 2 self-contained units, exceptional facts are required to treat as a single hereditament
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21
Q

What are the three assumptions for valuation in schedule 6 LGFA 1988?

A
  1. tenancy begins on the day determination is made
  2. in reasonable state of repair
  3. tenant pays rates and taxes for repair and insurance

Others may include vacant and to let; economic conditions at AVD; physical conditions at material day; value rebus sic stantibus (as it stands)

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22
Q

What are the methods of valuation?

A
  1. Comparable
  2. Receipts and expenditure
  3. Contractors basis
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23
Q

What is the process to appeal a RV?

A
  1. sign into account
  2. add property to your account
  3. send a check to change the property details
  4. following confirmation of a check then send a challenge case
  5. appeal if you do not agree
24
Q

What is a check case?

A

Confirm the property details held by VOA are correct alongside pointing out your reason for a challenge

25
Q

When can you challenge a valuation?

A
  • within 4 months of check decision
  • within 16 months of your check submission if the challenge is about a change in the surrounding areas (i.e. roadworks)
  • if the VOA has not made a decision on your check after 12 months
26
Q

Can you submit a challenge more than once?

A

Only once for the same reason.

27
Q

What are the grounds for a challenge? (8)

A
  1. Valuation is wrong
  2. Change to the property or surrounding area
  3. Change made by VOA is wrong
  4. The date of change made by VOA is wrong
  5. Property should be split into more than 1
  6. Property should be removed or added
  7. Valuation is wrong due to a legal decision
  8. Property details are wrong
28
Q

What if you don’t agree with a decision?

A

You can appeal for an independent review within 4 months of the challenge decision.

29
Q

What can you do if the VOA hasn’t responded to your challenge?

A

If VOA has not replied within 18 months of submitting a challenge, you have a right to appeal

30
Q

What is a MCC?

A

Material Change of Circumstances.

A physical change to your property or within the locality which may impact the rateable value such as:-

  • roadworks
  • building works
  • changes to road layout
  • change of property use
31
Q

In John Laing & Son v Kingswood 1949 what were the four essential ingredients that need to exist in order to determine whether an occupier is in rateable occupation?

A
  1. Actual occupation or possession
  2. Benefit to the occupier
  3. Exclusive for the particular purposes of the possessor
  4. The occupation must not be too Transient
32
Q

What is Actual occupation?

A

Legal possession is not enought and there should be actual use ‘on the ground’

33
Q

What is exclusive occupation?

A

The occupier should have the right to carry out the purpose of his or her occupation without anyone else on the premises doing the same.

34
Q

What is beneficial occupation?

A

Some benefit to the rateable occupier. Not in terms of profit but could include a public body fulfilling a statutory requirement such as the provision of schools, libraries etc

35
Q

What is mean by Transient occupation?

A

There must be a necessary degree of permanence and to be rateable the occupation of the land comprising the hereditament must exist for not too transient a period.

36
Q

What is meant by Corporate Veil?

A

Term used by the courts to establish the status and extent of businesses set up under the normal practice of a registered limited company. It is used to “ring-fence” liabilities and to defend parent companies from the losses or tax liabilities of subsidiaries.

37
Q

What types of Business Rates Relief are you aware of?(6)

A
  1. Small business rates relief
  2. Rural rates relief
  3. Charitable rates relief
  4. Enterprise zones
  5. Transitional relief
  6. Retail, Hospitality and Leisure relif
38
Q

What is small business rates relief?

A

RV:-
less than £12,000 = 0%
£12,000-£15,000 = gradual reduction from 100% to 0%

39
Q

What is rural rates relief?

A

Business in a rural area with population less than 3,000.

40
Q

What is charitable relief?

A

Up to 80% relief for charity’s.

Potentially a top up to 100% (discretionary relief)

41
Q

What is enterprise zones?

A

Geographically defined areas, hosted by Local Enterprise Partnerships in which commercial and industrial businesses can receive incentives to set up or expand

42
Q

What is transitional relief?

A

Limits how much your bill can change each year as a result of a revaluation.

2023/24:-
Up to £20K (£28K in London) = 5%
£20K to £100K (£28K in London) = 15%
Over £100K = 30%

2024/25:-
Up to £20K (£28K in London) = 10% plus inflation
£20K to £100K (£28K in London) = 25% plus inflation
Over £100K = 40% plus inflation

2025/26:-
Up to £20K (£28K in London) = 25% plus inflation
£20K to £100K (£28K in London) = 40% plus inflation
Over £100K = 55% plus inflation

43
Q

What is Retail, Hospitality and Leisure relief?

A

75% (previously 50%) off bills for 2023/24 up to a max £110K per business

44
Q

What is the business rates multiplier for 2023 to 2024?

A

51.2 pence or 49.9 pence for small businesses (RV below £51K)

45
Q

What was the multiplier for 2022 to 2023?

A

The same as the current year. It has been the same since 2020 to 2021.

46
Q

What was the total increase in RV in England and Wales following 2023 reval?

A

7.1%.

47
Q

When is the next AVD?

A

1st April 2024 with Material day being 1st April 2026

48
Q

What are the liability changes for 2023/24?

A

Downwards transitioning has been abolosihed.

49
Q

When was CCA introduced?

A

1st April 2017.

50
Q

What regions reflected the most change in RV’s following 2023 reval?

A

South East
South West
West & East Midlands
North West

51
Q

What sectors seen an increase following 2023 reval?

A

Mainly industrial & logistics and offices.

52
Q

What sectors seen a decrease following 2023 reval?

A

Retail, Hospitality and Leisure

53
Q

How long do the VOA have to respond to a check notice?

A

up to 12 months

54
Q

What is rebus sic stantibus?

A

A term used in rating valuations to mean in its physical state.

55
Q

What case law relates to Rebus Sic Stantibus?

A

Williams (VO) v Scottish & Newcastle Retail Ltd and Allied Domecq Retailing Ltd

APC (16 decks)

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