Local taxation/assessment

Question 1

What is a rateable value?

Answer 1

Rateable value is the annual rent a property would reasonably achieve on the assumption that it is vacant and to let in an open market and in a reasonable state of repair at a fixed valuation date.

Question 2

What is the current standard multiplier?

Answer 2

0.512

Question 3

What is the current small business rates multiplier?

Answer 3

0.499

Question 4

What is Small Business Rates Relief?

Answer 4

A relief for occupiers of a single non domestic property which has a rateable value of less than £15,000.

They can still qualify if they occupy an additional non domestic property with a rateable value of no more than £2,899. And that the total rateable value of all properties is less than £20,000 (£28,000 in London)

Question 5

What is transitional relief?

Answer 5

Transitional relief limits how much your bill can change each year as a result of business rates revaluation. This means changes to your bill are phased in gradually.

Question 6

What is Newbiggin v Monk? renovation

Answer 6

The rate payer submitted that the value of a property undergoing substantial renovation should be nominal as it would be incapable of rateable occupation. The rate payer assumed that the property would be incapable of beneficial occupation during the period of work and had sought a rateable value of £1.

Question 7

What is Lotus and Delta v Culverwell?

Answer 7

Provides the hierarchy of weight to be given to eviddence.
Sets out propositions for establishing procedure for considering evidence in a rating context.

Question 8

What dates are the current rating list?

Answer 8

01 April 2023 to 31 March 2026

Question 9

What is the current AVD?

Answer 9

01 April 2021

Question 10

What does AVD stand for?

Answer 10

Antecedent Valuation Date

Question 11

What is the AVD?

Answer 11

01 April 2021
the Antecedent Valuation Date sets the date for non-physical factors. And is set two years prior to the start of a rating list.

Question 12

What is the definition of rateable value?

Answer 12

Rateable value is the annual rent a property would reasonably achieve on the assumption that it is vacant and to let in an open market and in a reasonable state of repair at a fixed valuation date.

Question 13

Tell me about your understanding of the role VOA/Local/Central Government play in the management of business rates.

Answer 13

The role of the VOA etc. is to establish a fair and accurate rating list. the VOA have a statutory duty to compile and maintain a Rating List for each billing authority area under their control.
The local government is informed of the RV of a hereditament and will implement the correct multiplier to the rateable value to calculate and issue the liability to be paid by the ratepayer.
The central government decides the level of which the small and standard multipliers are set.

Question 14

What is the Local Government Finance Act 1988? create community charges

Answer 14

The local governance finance act 1988 is an act to create community charges in favour of certain authorities, to create new rating systems

Question 15

Tell me about Schedule 5 / 6?

Answer 15

Schedule 5 to the Local Government Finance Act 1988 provides the details for properties that are exempt from business rates and the use of properties which can be exempt from business rates.

Schedule 6 to the Local Governance Finance Act 1988 sets out the rateable value of non-domestic hereditaments 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.

Question 16

How does the basis of value for rating differ to market rent?

Answer 16

A rateable value is an estimate of what it would cost to rent a property for a year, on a set valuation date. Whereas, market rent is what it would cost to rent a property for a year, on the actual date.

Question 17

What are the 4 tests of rateability? What is the case law?

Answer 17

John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344

1. Actual occupation
2. Beneficial Occupation
3. Exclusive occupation
4. not be to transient

Question 18

What did the case of John Laing & Son v Kingswood Assessment Committee (1948) say about rating?

Answer 18

If any of these four essential ingredients or ‘tenets’ of rateable occupation are absent then the occupier cannot be in rateable occupation

Question 19

How does Council Tax differ from business rates?

Answer 19

council tax is paid on domestic properties, whereas business rates are paid on commercial properties.

Question 20

What approaches do the VOA use when valuing non-domestic property?

Answer 20

The VOA uses the ‘rental’ method to value non domestic property.
The profits method to value hereditmanents that are a public house, hotel.
Contractors method to value hereditaments such as waste transfer stations

Question 21

How does air conditioning affect value differently in different use classes?

Answer 21

In a warehouse or office, air conditioning will effect the value at a factor of 1.1 times the adjusted rate for the area it is found.
In retail, air conditioning will effect the rateable value by applying a rate of £7 per m2 of the air conditioning coverage.

Question 22

Tell me about Woolway v Mazars.

Answer 22

All floors in a multi-occupied office building occupied by the same entity must be separately assessed even where the floors are contiguous, save where there is a direct link without passing through the common parts.

This has since been replaced by The rating (property in common occupation) and council tax act 2018

Question 23

Tell me about Newbigin v Monk.

Answer 23

The rate payer submitted that the value of a property undergoing substantial renovation should be nominal as it would be incapable of rateable occupation. The rate payer assumed that the property would be incapable of beneficial occupation during the period of work and had sought a rateable value of £1.

Question 24

Explain the Cardtronics Ltd v Sykes case.

Answer 24

Disputed whether ATMs should be rated separately from the retail premises.
Ruled that the ATMs in the retail premises in question are not separate units for rating purposes and the alterations to the rating list should not have been made. To be a hereditament, a unit must be identifiable as a self-contained “unit of property”

Question 25

Explain the outcome of Jackson (VO) v Canary Wharf. Fit out

Answer 25

The outcome of Jackson v canary wharf was that the separation of the stripping out from the fitting out did not prevent the premises from being under reconstruction and, therefore, incapable of beneficial occupation.

A continuous programme of works was not required and the rateable value was restored to a nominal £10 during that period.

Question 26

What does the RICS Consultancy Code of Practice say? Has it been recently updated?

Answer 26

RICS Professional Standrd - Rating Consultancy code of practice UK
5th Edition, April 2024
Effective June 2024

sets out the standards of practice that rating consultants must adopt in all cases where they are either seeking instructions, or are approached by a new or existing client, to provide advice in relation to non-domestic rating matters. It has mandatory application in relation to rating consultancy work.

Question 27

What does RICS Rating Appeals Guidance note say?

Answer 27

RICS Rating appeals is written for any surveyor who is involved in a proposal to alter the rating assessment of a client’s property. It takes the surveyor through every stage of an appeal, including:

How and when to make a proposal;
The grounds for making a proposal;
What to do if there is no agreement - going to a Valuation Tribunal;
Valuation Tribunal procedures;
Pre-hearing preparations; and
The stages involved in the hearing.

Question 28

How are rates payable calculated?

Answer 28

Take the rateable value and the relevant multiplier. up to £51,000 RV is small business multiplier. Over £51,000 RV is the standard briskness multiplier

Question 29

Tell me about the process of challenging the rating list.

Answer 29

To challenge the rating list you firstly have to process a check, which is where the factual details are agreed. When the decision notice of a check comes back there is a four month window of which the challenge is to be submitted. In the challenge, valuation aspects are argued, such as rental value as of the avd, allowances such as access/layout/split site etc. and applying case law in support of the appeal.

Question 30

What is the UBR?

Answer 30

The uniform base rate, is the value applied on a £ per m2 basis without factoring in the property details.

Question 31

What is a hereditament?

Answer 31

A hereditament is a 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 a valuation list

Question 32

What is the Valuation Tribunal? Statutory body

Answer 32

The Valuation Tribunal for England is a judicial statutory body. It deals with appeals about Council Tax and non-domestic (business) rates.

Question 33

What is small business rates relief and when does it apply?

Answer 33

It is a relief given to support small business.
It applies when the property’s rateable value is less than £15,000 and the business only uses one property or if none of the other properties have a rateable value above £2,899, and the total rv of all properties is less than £20,000.
In London this differs for a total RV of £28,000.

Question 34

What rates reliefs currently apply?

Answer 34

Small Business Rates Relief (SBRR)
Supporting Small Business Rates Relief (SSBR)
Retail, Hospitality and Leisure (RHL)
Rural Rate Relief
Charitable Relief
Transitional Relief (TR)

Question 35

Do charities pay business rates?

Answer 35

Yes, Charities can pay business rates however they charitable relief can grant up to 80% off the business rates bill. And in some cases the council may top up the discount so they don’t have to pay business’ rates.

Question 36

What is the antecedent valuation date?

Answer 36

The antecedent valuation date is the 01 April 2021, and is the valuation date of the rating list for non-physical factors.

Question 37

Who is liable to pay empty rates?

Answer 37

If you get empty property relief, you do not have to pay business rates on your empty property for 3 months. The relief starts from when the property becomes empty. After this time, most businesses must pay full business rates.

Question 38

What are empty rates?

Answer 38

If you get empty property relief, you do not have to pay business rates on your empty property for 3 months. The relief starts from when the property becomes empty. After this time, most businesses must pay full business rates.

Question 39

Are there any exemptions from paying business rates?

Answer 39

agricultural land and buildings, including fish farms

buildings used for the training or welfare of disabled people

buildings registered for public religious worship or church halls

Question 40

What dates are relevant to the current rating list?

Answer 40

AVD - 01 April 2021
Rating List - 01 April 2023 to 31 March 2026

Question 41

Why was the last revaluation delayed?

Answer 41

Due to covid-19 the Government announced a delay to 2023, which was implemented by the Non-Domestic Rating (Lists) Act 2021

Question 42

What is a MCC?

Answer 42

A Material Change in Circumstance.

The rateable value shown in the list for a hereditament is inaccurate by reason of a material change of circumstances which occurred on or after the day on which the list was compiled.

Including matters affecting the physical state or physical enjoyment
the mode or category of use

Question 43

What is uneconomic disrepair?

Answer 43

if the repair costs are so out of proportion to the rental value that a reasonable landlord would not spend the money doing them.

Question 44

What is a Section 44A certificate?

Answer 44

Section 44a of the Local Government Finance Act 1988 provides that where part of a business premises appears to be unoccupied, and is expected to remain so for a short time only, the authority may ask the Valuation Officer to certify the relevant rateable values for the occupied and unoccupied parts.

Question 45

What do you understand by a partly occupied hereditament?

Answer 45

apportion the rateable value of the hereditament between the occupied and unoccupied parts of the hereditament and to certify the apportionment to the authority.

Question 46

What is a completion notice?

Answer 46

A completion notice is a document that specifies the ‘completion date’ – this is the date on which a commercial premises becomes rateable and enters the rating list for business rates purposes.

Question 47

How do you start a rates appeal?

Answer 47

To start a rates appeal you have to first confirm the property details at check stage. This is done through the check challenge appeal service on the government gateway. The check could be to confirm no changes have been made or there the property details held are incorrect and need amending.

Question 48

Are there any risks associated with submitting an appeal?

Answer 48

Yes there are risks associated with submitting an appeal, as any appeal could result in the rateable value increasing or decreasing.

Question 49

Who may submit an appeal?

Answer 49

(i) every person whose agreement is required under Reg 12

i.e.

 (a) VO,

 (b) Proposer,

 (c) Occupier at the date of proposal 

 (d) Ratepayer at date of agreement,

 (e) Any IP 

(ii) anyone who has been a ratepayer of the hereditament since the date of confirmation of check (as defined in Reg 4(1)(c)).

Question 50

In which circumstances may an appeal be made? VT

Answer 50

An appeal can be made should the proposer disagree with a challenge decision can be appealed at VT.

Question 51

Are there any time limits for serving a proposal?

Answer 51

There is a 4 month time limit in serving a proposal to the valuation tribunal appeal. This time limit starts from the date of the challenge decision notice.

Question 52

What information needs to be provided? Valuation tribunal

Answer 52

The appeal form needs be complete explaining why you think the voas challenge decisioon is wrong.
Also need to attach a copy of the voas challenge decision to the appeal form as well as all documents and correspondence presented at challenge stage.

Question 53

Can you appeal a VT decision?

Answer 53

Yes you can appeal a VT decision and appeal to the Upper Tribunal within 28 days of the date of the decision.

Question 54

What is the difference between the antecedent valuation date, the material day and the effective date?

Answer 54

The AVD is fixed for the life of the rating list, and relates to the rental value for similar properties as of the date.

The material date is the day on which certain “relevant matters” are taken into account for valuation purposes when considering an alteration to a list.

The effective date is the day from which all those matters and value apply.

Question 55

How are rates collected?

Answer 55

Local businesses pay business rates to their local council/billing authority.

Question 56

How are rates distributed?

Answer 56

The local government retains half of the income with he other half paid to the central government.

Question 57

Why are tenant’s improvements such as a compressor (power) rateable?

Answer 57

as it adds value to the property itself.

Question 58

What is ‘tone of the list’?

Answer 58

Tone is the general level of bands which have been established in an area for a particular type of property.

Question 59

What are the 6 propositions in Lotus and Delta Ltd v Culverwell (VO) and Leicester City Council (1976)?

Answer 59

1 - Where the subject property is actually let, that rent should be the starting point.
2 - The more closely the circumstances to which the rent is agreed, the more weight will be attached
3 - Where rents of similar properties are available they are to be compared to assess the level of value.
4 - Assessments of other comparable properties are also relevant.
5 - In the light of all the evidence an opinion can then be formed of the value of the appeal hereditament
6 - where there are no rents available of comparable properties a review of other assessments may be helpful but in such circumstances it would clearly be more difficult to reject the evidence of the actual rent.

Question 60

What does rebus sic stantibus mean?

Answer 60

it is a term used in rating valuations to mean in its actual physical state. It states that the hereditament (unit of property) must be valued as it is or stands.

Question 61

How does Council Tax work?

Answer 61

Council Tax is an annual fee your local council charges you for the services it provides for domestic properties.

Question 62

How does council tax differ from business rates?

Answer 62

Council tax is charged on domestic properties where as business rates is charged on non domestic properties.

Question 63

What factors affect UBR?

Answer 63

Factors that affect the UBR are things such as, lack of heating, lack of insulation, air conditioning,

Question 64

Tell me about a supplement / levy applied to the UBR?

Answer 64

Cross rail charge is applied to properties in London with a rateable value over £75,000

Question 65

Tell me about how you would deal with air conditioning / raised floors in a rating instruction.

Answer 65

In dealing with air conditioning in a rating instruction I would apply a a factor of 1.1 to the adjusted rate for the area in which the air condition is effective.
In dealing with a raised floor in a rating instruction, I would apply a factor of 1.05 to the adjusted rate for the area in which the raised floor is effective.

Question 66

How are ATMs valued for rating purposes?

Answer 66

It is the site of the machine rather than the machine itself which may be rateable.

Question 67

What happened in the case of Abbey National PLC v O’Hara (Valuation Officer) (2003)? Banana Zoning

Answer 67

A ratepayer’s attempt to value a bank that was situated at a crossroads, by zoning it from both of its frontages ‘banana zoning’ was rejected. Instead, the LT confirmed the approach taken by the VO (and preferred by the VT) to zone it from the street on which it had the greater proportion of its display windows and a direct entrance into its banking hall (Queen Street).

Question 68

What is banana zoning and was it rejected at Tribunal or not?

Answer 68

Banana Zoning is where the Zoning starts from both its frontages. Occurred in Abbey National v O’hara, where the property was situated on a crossroads, and the ratepayer zoned from both its frontages. This was rejected at VT and the decision was that the zone should start on the street with the greater proportion of display windows.

Question 69

Explain the precedent set in the 2021 case; R (Secretary of State for Health & Social Care) v Harlow District Council, relating to the nature of rateable occupation. (Intention)

Answer 69

The precedent set in the 2021 case was that a present intention to occupy coupled with slight occupation is sufficient to constitute rateable occupation

Question 70

What did the High Court rule in R (Secretary of State for Health & Social Care on behalf of PHE) v Harlow DC (2021)? storage boxes

Answer 70

The high court ruled in favour of PHE and that the storage of archive boxes was sufficient to demonstrate rateable occupation for the six week periods and that the empty rates exemptions for the periods are to be applied.

Question 71

What precedent was set in the charity relief case of London Borough of Merton Council (Appellant) v Nuffield Health (Respondent) (2023)?

Answer 71

provides clarity on how charity law and rating relief align. it confirms that registered charities operating over multiple sites will be able to obtain relief without having to demonstrate that the activities on each site would have qualified as a charity in their own right

Question 72

Tell me about how the last rating revaluation affected tenants/landlords/your role.

Answer 72

The last rating revaluation has affected tenants and landlords both positively and negatively. In most industrial cases the rateable value has increased which is a negative impact, however with transitional relief the initial increase will be stepped over the years to help with the increases.
With retail, we have seen rateable values decrease as a result of the struggling high streets, meaning the liability of these shops have decreased.
My role has been affected by the change of market, having to determine the rental value of the AVD and the impact of Covid on the rental market.

Question 73

Tell me about a rating appeal you have submitting upon behalf of a client.

Answer 73

One rating appeal I have submitted was based on the property details. It was a new assessment compiled into the rating list in 2021. Having inspected and measured the property I found the area to be sum 5000 sqm smaller than the assessment. I provided a report amending the areas and reduced the rateable value by £200,000.

Question 74

Tell me about your experience of the compiled list/MCC appeals?

Answer 74

I have limited expereince in MCC appeals however I am aware of when they can take place, such as roadworks impacted the business.

In regard to the compiled list I have had experience since the revaluation and have so far been focusing on whether the property details are correcet whilst collating rental evidence to assess whether the correct level of tone has been applied.

Question 75

Tell me about a favourable rating outcome you have negotiated for a client. Home from Home

Answer 75

One favorable rating outcome I have negotiated was on a nursery. Applying the first proposition of lotus and delta i analysed the rental value at AVD and found grounds to reduce the rateable value. The VOA agreed with the rental value however, came back with adjustment for fit out carried out. Of which I was happy to accept as the difference was minimal in regard tot he rateable value.

Question 76

How do you define a “prime” pitch?

Answer 76

A prime pitch is the most desirable and most expensive property in a location.

Question 77

Did you zone your retail comparable and if so how?

Answer 77

No I did not zone my comparable. On the rating assessment the zone A rate had been applied to properties in the locality/parade. I assessed whether the comparable were located on the same parade as to whether the zone a rate should be applied.

Question 78

Did you find it necessary to visit the area to value your unit? Do you think it is always necessary to inspect in person?

Answer 78

Yes, it give an indication of the area and the values applied. It provided me an understing of where the prime pitch was for this parade. Yes i think it is necessary to inspect in person to gain a good understanding of the area. You can see how active the area is and the level footfall which can impact the value/MCC.

Question 79

How did you discover that the VOA data was incorrect? Preparing reports level 2 SOE

Answer 79

I discovered it was incorrect following my inspection where i measured the property and assessed the factual property details.

Question 80

How did you structure your fee for this instruction?

Answer 80

The fee was structured on a no win no fee basis, at an agreed % of savings generated.

Question 81

Tell me about a valuation method you have utilised in a rating valuation.

Answer 81

I have utilized the comparable method of valuation. I assessed the market and found properties in the same valuation bandings as the subject property and analysed rents found around the AVD. I have determined the rental value per m2 to determine of the value per m2 is fair on the current rating list.

Question 82

Tell me how you have complied with the RICS guidance in a rating VT case?

Answer 82

I have complied with the RICS guidance in a rating VT case by providing the correct and relevant documents in submission to the VT. By providing a statement of agreed facts and matters in dispute.

Question 83

It is difficult to advise a client to deal with an initial increase in liability, how did you manage this?

Answer 83

I provided my client with a report which outlined what the assessment currently is, what the assessment would be if the areas were corrected and what it could be if the areas were corrected and the correct level of value as per the comparable evidence was applied. I talked through the risks of appealing and my client was happy to provide the factual details as they would rather have paid the correct level from the beginning than be hit with a bill down the line.

Question 84

What were the contents of the tribunal pack?

Answer 84

The tribunal pack included the appeal form and a consolidated document including all documents submitted at challenge and all correspondence with the voa relating to the challenge, including the challenge decision notice.

Question 85

What is a clients liability for a valuation tribunal if they lose and how did you advise your client on this risk? VT

Answer 85

To appeal there is a fee of £150 (for smaller proposers) or £300 (for any other proposer). If you’re appealing where the VOA have not sent their challenge decision notice within 18 months of making your challenge, the appeal is free.

Question 86

What was the outcome? PET Tool Hire

Answer 86

The appeal has yet to take place.