Local Taxation Flashcards
What items of Plant and Machinery are rateable?
Any P+M which is significant to the functioning of the business
Tell me about empty property rate relief
Office and shops can claim empty rate relief for 3 months
Industrial and warehouse get relief for 6 months
If a lease is signed for 6 weeks then they can then apply for empty relief.
Lead case is Macro properties v Nuneaton and Bedwort Borough Council 2012
Why do we have an AVD and not value at the effective date?
to give the VO time to produce and update the list.
What is rateable value?
Rental value based on the assumption that:
hypothetical tenancy begins on material day levels of value at AVD.
Hereditament is in ‘reasonable repair’
Tenant pays all rates taxes and has FRI lease
Year to year – annual tenancy with prospect of continuance.
what is the material day
Day we take all physical factors affecting property and the locality.
what is AVD
Antecedent valuation date
Day we take all non-physical factors; levels of value, economy and law
2017 list = 1 april 2015
2023 list (postponed from 21’) = 1 april 2021
what is a hereditament
A property which is an entry in a rating list (Section 115 of General Rate Act 1967)
what is an FRI lease
Full repairing and insuring lease – liability on tenant
what is an IRI lease
Internal repair and insuring is liabile to tenant, external repairs is landlords, may be claimed back via a service charge making it effective FRI.
where is the definition of rateable value found?
Schedule 6 Local government and finance act 1988
What is not rated according to schedule 5 Local government and finance act 1988? Can you name at least 3?
Domestic property Parks Religious buildings Agricultural land Agricultural buildings Fish farms lighthouses
how does the small business relief scheme work?
If a business has 1 hereditament with an RV of less than £15,000 or multiple hereditaments totalling under £20,000 they can apply for SBRR.
Sliding scale of relief between £12k and £15k.
How does the Charitable rate relief work?
If a hereditament is used for charitable purposes they get 80% statutory relief off their rates bill.
The remaining 20% is at local authorities discretion
what is transitional relief and how does it work?
A scheme to lessen the impact of significant RV increases and decreases between rating lists.
The liable amount is adjusted to buffer the impact.
In essence – amount payable won’t go up or down as much as it originally would have done.
Normal rules for determining a unit of assessment (3 rules)
1 area of land
1 occupier
1 use
what are the four tenants of rateability?
Actual occupation – tangible same place every day
Beneficial – capable of being used for its intended purpose
Exclusive occupation – sole occupation of hereditament
Transient – not too transient, degree of permanence
Rateability lead case
J Laing v Kingswood 1949
Tell me about the case J Laing v Kingswood 1949
The Court of Appeal adopted 4 essential determinants of rateable occupation. These are that the occupation must be actual, exclusive, beneficial and not too transient.
What is rebus sic stantibus
‘things standing thus’ in latin. Taking things as they stand Two limbs Physical limb – assume property its in physical state Use limb – assume use staying the same
What is the material day for a compiled 2017 list appeal?
1 April 2017
what is the material day for a material change in circumstance appeal?
Day of proposal (check submission date)
what is the material day for splits and mergers?
Day of event
What is the effective day
Day liability stops, starts or changes
Usually material day unless there is an increase in RV then Effective date will be the day the list is altered.
Important date for ratepayers as this it affects finances.
Can you name the two secondary legislations for 2017 list alterations
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
tell me about Newbigin v Monk (2017)
S J & J Monk own the freehold of the first floor of a three-storey Office building in Sunderland
- well known case on BENEFICIAL OCCUPATION
- They requested to reduce ratable value during reconstruction period.
- Issue was do we value at the 2012 condition where the unit was stripped out undergoing construction, or do we assumes a reasonable state of repair (para 2 schedule 6)?
- VO rejected, VT upheld this, Upper Tribal allowed SJJM appeal, Court of appeal reversed and allowed VO appeal, then Supreme Court reversed and allowed SJJM in line with Upper Tribunal.
- Hereditament incapable of beneficial occupation is not rateable
- Repair assumption is irrelevant
Tell me about Jackson (VO) v Canary Wharf (2019)
- concerned a number of floors in Canary Wharf’s iconic tower at 1 Canada Square.
- well known case on beneficial occupation.
- In accordance with Canary Wharf’s usual practice, following the vacation of the previous tenants each of the floors had been stripped back to shell condition, and upgrading works were carried out.
- The VO argued that, in the absence of a programme of works, there was no admissible evidence bringing the property within the ambit of the Monk Newbigin case. The VO thus valued the floors as though they were offices in repair.
- VT held in favour of Canary wharf, VO appealed but Upper tribunal rejected appeal.
- Premises which are not capable of beneficial occupation cannot represent a hereditament, and therefore should not be included in the rating list
what is meant by goodwill in rating?
The value of the business as a trading entity – where the incoming tenant is in the same trade as the outgoing tenant.
- Goodwill could be included within a premium payment for a lease
- Payment by the incoming tenant to reflect obtaining the benefit of existing clientele .
tell me about Gilbert v Hickingbottom (1956)
Lead case on hereditament assessment before Woolway v Mazars
Three general rules:
1. Properties in same occupation within curtilage or contiguous = 1 hereditament
2. Properties in same occupation but not in curtilage nor contiguous = separate hereditaments
3. Properties in same occupation but separated by highway = 1 hereditament – but only if the two are essential to one another
what is the definition of rateable value
Estimated rental value of a hereditament year to year on three assumptions being
Tenancy begins on material day at AVD levels of value.
Immediately before tenancy hereditament is in reasonable state of repair, excluding repairs a reasonable landlord would consider uneconomic.
Tenant pays all rates, taxes and has an FRI lease.
Found in LGFA 1988 Paragraph 2, Schedule 6
tell me about Woolway v Mazars LLP (2015)
question in this appeal is how different storeys under common occupation in the same block are to be entered in the rating list.
Concerned Tower Bridge House, an eight-storey office block in St Katherine’s Way, East London.
Mazars, a firm of chartered accountants, occupies the second and sixth floors of the building under separate leases. These floors are separated by common areas in the building and were entered in the 2005 rating list as separate hereditaments.
In February 2010 Mazars applied to the Valuation Tribunal to merge the two entries to form a single hereditament.
The VTE agreed that the two entries should be merged. The Valuation Officer, Mr Woolway, appealed to the Upper Tribunal who confirmed that the premises could be treated as one hereditament.
The Court of Appeal dismissed Mr Woolway’s appeal. Mr Woolway appeals to the Supreme Court. The Supreme Court unanimously allows the appeal.
Lord Neuberger, concurring with Lord Sumption and Lord Gill, concludes that a hereditament is a self-contained piece of property, where all parts are physically accessible without having to go onto other property.
If contiguous units do not intercommunicate and have to be accessed via other property of which the common occupier is not in exclusive possession, this will be a strong indication that they are separate hereditaments.
This completely changed the landscape from the Gilbert v Hickingbottom 1956 case. Creating what was called staircase tax.
what is the PICO 2018 act
The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018 reverses the Supreme Court decision in Woolway v Mazars LLP which required non-intercommunicating occupations to be assessed separately and reverts back to the former VO practice where separate but adjoining areas, used for the same purpose and in common occupation are valued as a single assessment.
- Act took effect from 1 April 2010.
- Following the 2017 Autumn statement regarding the reversal of the effects of the ‘stair-case tax’, an addition to the definition of hereditament was made to the Local Government Finance Act 1988.
The amendment ordered the Valuation Officer to assess together properties that were made to be individual assessments following the Supreme court decision in Mazars.
what is contiguous?
Two areas which are used by the same common occupier who share a wall, fence, or other means of enclosure.
Ceilings and floors, where directly overhead or below each other, will allow property to be considered as contiguous where the properties are in the same occupation.
property will still be considered contiguous if there is a service space between the floor and ceiling, control of which remains with the landlord.
how does contiguity work for empty property?
Previously occupied contiguous property will continue to be one assessment where it all becomes empty on the same day. If parts are vacated on separate days then individual assessments will apply.
What are the three CCA stages?
Check – ratepayer confirms or edits details about their property
Challenge – once property details are agreed they can then challenge the valuation
Appeal – if the challenge result is unsatisfactory, they can take the case to tribunal (up to £300)
CCA timelines
VO have 12 months to resolve a check (3 month aim) if not complete the IP has the right to move on to challenge.
- Challenge must be made within 4 months of check completion date (16 months for external MCC)
- Challenge must be resolved within 18 months or IP has the right to go direct to appeal stage.
- IP appeal to VTE within 4 months of decision notice
what is the RV multiplier?
- 9p – Small business
54.6p – standard rate
why was CCA introduced?
Reformed the rating appeal system to make it more efficient.
ensures that factual issues are dealt with early in the process, by requesting the confirmation of these details up front.
what is the CCA process
Check Challenge appeal is the legal provision used by the VOA to allow ratepayers and their agents, to contest the accuracy of factual information, and/ or levels of valuation, for their rating assessment.
What is the central rating list
Rating list containing assessments of the network property of major transport, utility and telecommunications. Such as: Electric, gas and water supply networks Railways Telecommunication networks Cross country pipelines
how is property in the central list valued and paid?
Single totalled rateable value figure for all the property occupied by the ratepayer.
Rates are paid direct to the Department for levelling up, Housing and Communities.
where is the central list located?
Can be viewed on public domain gov.uk website
Can you name 3 ratepayers on the Central List
Network Rail London Underground Dockland light railway British Telecommunications (BT) Sky telecommunications National grid gas Northern Gas networks Southern Gas networks Severn Trent Water
How would you go about valuing something you thought was plant?
Firstly consider is it plant? Ask occupier, take photo and/or ask colleague if unsure
Secondly Is the item listed in the 2000 p+m regs?
What p+m classes are there?
Class 1 - Power
Class 2 - Services
Class 3 - Infrastructure
Class 4 – Structures (contains 2 tables)
