Local Taxation and Assessment Flashcards
What is the relevant legislation associated with Business Rates?
General Rate Act 1967
Local Government Finance Act 1988
Rating Valuation Act 1999
What is the current Uniform Business Rate?
2020/2021
£0.499 for RV less than £51,000
£0.512 for RV over £51,000
£0.532 for City of London, Wales and Scotland and London with RV over £70,000 for Crossrail Supplement.
When was the last Rating revaluation?
2017, based on values from 1st April 2015.
The next revaluation will be in 2023 with values from 1st April 2021 (Antecedent Valuation Date)
How often is the list revalued?
Previously every 5 years but now every 3 years.
The annual updating of business rates has also switched from RPI to CPI.
What were the recent Governement initiatives to assist businesses during COVID-19?
100% relief for 12 months for Retail, Leisure and hospitality
Grants for eligible small business users, e.g. £10,000 grant for businesses with RV of up to £15,000.
Premises in Northern Ireland, Scotland & Wales also benefited from rates relief.
What factors are essential for rateable occupation?
BEAT
Beneficial Occupation
Exclusive Occupation
Actual Occupation
Transience or permanence
What are the rules that must be satisfied for a hereditiment?
Single rateable occupier In a billing authority Be capable of separate occupation Single geographical unit Single use Single definable position
Who sets the Rateable Value?
The Valuation Office Agency (VOA)
VOA is part of HMRC
What is the Rateable Value?
The annual rental value on the AVD of a property assuming a hypothetical tenancy based on the following assumptions:
Vacant Available to let on an annual tenancy FRI terms In good repair Tenant pays rates Current use No alterations may be made (only minor ones)
What is the rating list?
A statutory document setting out rateable values.
Current AVD is 1st April 2015 for the new list from 1st April 2017.
What are the methods of Rating Valuation?
Comparable
Contractors
Profits (Receipts and Expenditure)
What is transitional relief?
A scheme for transitional relief to lessen the impact of large RV increases as a result of revaluation.
What guidance has the RICS released on Rating?
Rating Consultancy Code of Practice 4th Edition - 2017
What is a completion notice?
A notice served by the VO on the owner of a newly constructed property specifying a proposed completion day.
Section 46a of Local Government Finance act 1998
Prevents the party avoiding paying rates by not completing the construction.
What did the RICS release on appeals?
RICS Rates Appeal Guidance Note, 2017
How do appeals work?
An interested party can appeal the VOA
Grounds for appeal set out clearly - only once per applicant in the list
Check, Challenge and Appeal process
Target period notice - timescale set to agree the appeal by the VOA
Appeals are initially heard by the Valuation Tribunal
Can proceed to the Upper Tribunal (Lands Chamber) and House of Lords
Can partially occupied buildings be exempt?
Yes - Section 44a of the Local Government Finance Act 1998
Allows for exemption from rating of partly occupied buildings, by appointment, at the discretion of the Local Rating Authority.
What did the Business Rates Supplement Act 2009 enable?
Local Authorities can charge an extra 4.5% to raise money to be spent on Economic Development.
Only on RVs over £70,000
What rules apply to empty properties?
Rating (Empty Properties) Act 2007
Empty property rate is 100% of rates payable
3 months relief for offices and shops
6 months relief for warehouses and industrial
If an empty property is re-occupied for more than 6 weeks and becomes empty again, it will qualify for the 3/6 month relief.
In Oct 2018, announcted the implementation of a retail discount scheme for rates for occupied premises with an RV less than £51,000 for 2020-21. 1/3 of bill discounted.
What properties are exempt from Business Rates?
Vacant listed buildings
Charities
Properties where the owner is prohibited by law from occupying it - E.g Closing of demolition order
When the RV of the property is less than £2,900
Properties held by companies in administration or in receivership
Community amateur sports clubs
What anti avoidance measures are in place to prevent Business Rates avoidance?
If property is damaged to avoid rates, VO required to disregard the changed state (needs to be capable of beneficial occupation)
Completion notice
What recent rating cases do you know about?
Makro Properties Ltd vs Nuneaton & Bedworth Borough Council (2012)
- Intermittent occupation of warehouse
Newbigin vs S.J. & J. Monk (2015)
- Repairs vs improvements. RV of £0 when works being carried out that prevent it from occupation
Woolway vs Mazars (2015)
- Non contiguous floors under same assessment
Rosendale BC & Wigan Council vs Property Alliance Group (2019)
Sec of State for Business, Energy & Industrial Strategy vs PAG Asset Preservation Ltd (2019)
What relief can small businesses get?
Small business rate relief.
RV up to £12,000 - no rates payable
RV £12,000 - £15,000 - tapered relief between 100% and 0%
