Local Taxation / Assessment Flashcards
Waters v Cox (2024)
- Approach of UT when looking at hypothetical tenant was not deviate from Waters approach unless there was a strong reason why the hypothetical tenant would behave different.
Eg Farm Manager salary (would a hypothetical tenant employ a farm manager, court thought no) - Allows occupiers to take comfort in the fact that the RV reflects the true situation on the ground.
What is a MCC
When there is a material change of circumstances on the material date which affects the value of the hereditament on the AVD.
A proposal can be made under Regulation 4(1) (b) under The NDR (Alteration of Lists and Appeals) Regulations 2009
Grounds for a MCC are stated in LGFA 1988 Schedule 6 Paragraph 2 Section 7
NRD Act 2023 introduced changes to MCC from 2023 onwards to tighten the scope of MCC provisions such that legislation from public bodies should not be grounds for a change.
Relevant matters:
(a) matters affecting the physical state of the hereditament, and
(aa) matters affecting the physical enjoyment of the hereditament.
b) the mode or category of occupation of the hereditament,
c) the quantity of minerals or other substances in or extracted from the hereditament,
cc)the quantity of refuse or waste material which is brought onto and permanently deposited on the hereditament,
(d) matters affecting the physical state of the locality in which the hereditament is situated, and
(da) matters which, though not affecting the physical state of the locality in which the hereditament is situated, are nonetheless physically manifest there.
2(7)(e) the use or occupation of other premises situated in the locality of the hereditament must be disregarded if that change is directly or indirectly attributable to:
Legislation of any country
Provision made under legislation of any country
Advice and guidance by a public authority of any country
Anything done by a person to comply by the above
Wigan Football Company Limited v Cox (VO)
2019
Relegation of Wigan Football club from Premier League to League One.
VT did not constitute this as a MCC because the football club is the only potential tenant.
However, accepted that the valuation method is outdated due to broadcasting revenues
Merlin Entertainments Group Ltd v Cox (VO)
2018
Reduction in footfall caused by an event on site is not an MCC as per Schedule 6 of the LGFA 88 paragraph 2(7)(d)
The result in footfall was a consequence within the hereditamnet and not the locality. Locality must lie outside the hereditament.
Does not affect the physical state of the hereditament
nor physical state of the locality
Kendrick v VO (heathrown first class lounges) - the crash mainfested outside the hereditamnet
What is the material day
The Check confirmation date
Fryer v Cox 2022
Farm attraction site
R&E valuation method used
VOA used simplified valuation approach, applying 6-9% of gross receipted to determine RV. However could not provide evidence
This method was rejected by the VT as ignored specifice property characteristics (lack of utility connections)
Reduced the RV to £11,750 bringing it below the Small Business Rates Relief threshold.
Small business rate relief
under £12,000 no liability if only property
£12,001 to £15,000 goes down gradually from 100% to 0% (ie £13,500 then it is 50% off)
Owning more than one property
You will still get existing relief on your main property for 12 months
You can still get relief on your main property if:
None of your secondary properties are above £2,899
Total RVs of the properties are less than £20,000 (£28,000 in London)
Newbiggin v SJ and J Monk 2015
Property undergoing works must still be valued
Works were repairs not improvements - therefore RV should remain
Valuation for rating must assume that the property is in a reasonable state of repair
In 2017 the Supreme court overturned the Court of Appeal decision
Because the property is incapable of beneficial occupation and therefore should have a nominal RV
Incapable of beneficial occupation case law
Jackson v Canary Wharf 2019 (Upper Tribunal)
Applies to Newbiggin v Monk
Between between strip and shell
CAT A office
Porter v Trustee of Gladmann Sipps (2011)
Property is not capable of beneficial occupation until all the services and facilities are installed for the required purpose of the office.
What is the law behind rateable occupation
Laing v Kingswood Assessment Committee 1949
Rateable occupation requires exclusive occupation that has some benefit to the occupier and is sufficiently permanent
Davies Street - intercommunicating
Woolway v Mazars (2015)
Firm of accountants, occupied Floors 2 & 6 of Tower Bridge House. The floors were not connected and assessed as two hereditaments Mazars therefore appealed this.
VT
The VT agreed that the two assessments should be valued as one because were occupied by the same business and were functionally inter-dependent.
VOA appealed to UT
UT determined that should be a single hereditament, but not inter dependent but rather whether it was possible to move between the two floors without leaving the building.
VOA appealed to Court of Appeal
Court of Appeal supported UT decision
VOA appealed to the Supreme Court
Decision was that it should be two separate hereditaments
test is direct intercommunication with one another
What was the other case which was relied on for the intercommunicating case
Gilbert v S Hickinbottom & Sons Limited (1956)
Leading case for whether a property should be treated as one hereditament
Supreme Court in Woolway v Mazars relied more on Scottish cases
PICO
Property In Common Occupation became law 1 November 2018
After Woolway v Mazars (from this decision this saw ratepayers liability increase significantly even if properties were contiguous)
The Act allows properties that are “contiguous”, and are in common occupation, to be treated as a single hereditament
Ie touching walls. Consecutive floors even if separated by stairs
What did not happen at Angel Lane
There was no completion notice
This is in accordance with Section 46a of the LGFA 1998 issued by the Billing Authority to confirm the date of completion.
No RV should be attributed if have not received in accordance with the Rating Manual Section 2: Valuation Principles part 3 Section 2.1
There is a right of appeal with a completion notice
What case law did you use at Endeavour Square
Lotus and Delta v Culverwell and Leicester City Council
o’Brien v Harwood 2003 (tone of the list)
What are the principles set out in Lotus and Delta
- The rent is the starting point. (I accept it is 7 years after the AVD) also taken into account Garton v Hunter (Garton admissibility). All evidence is admissible in court.
It all comes down to weight with terms of the rating hypothesis. - Other rents of comparable hereditaments
- Comparable Assessment values
- Stand back and look (similar sizes, similar operations, BBB is
being used as an entertainment centre) - Come back to the entire basket of evidence
Four essential factors for rateable occupation
B beneficial occupation
E exclusive occupation
A Actual occupation
T Transcience or permanence (not short term)
Hypothetical Tenancy 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)
VINCA TF
What is rebus
As it stands
2 limb test
Physical State
Use (mode or category of occupation)
What RICS standard do you refer to in Rating
RICS Professional Standard: Rating Consultancy Code of Practice 1 June 2024 (5th edition)
Sets out advice and best practice for surveyors undertaking rating work.
Rebus case law
Williams v Scottish and Newcastle and another 2001
Must reflect the actual mode or category of occupation and not another use. In accordance with Rebus
This case was about Public house in a shopping centre
VO wanted to value the Public House as a shop
Fir Mill v Royton and Jones
Cotton Mill / Factories
Decision was that they should be valued the same because:
- They were to be used by the hypothetical tenant for the same mode or category of occupation as that of the existing occupiers. ie mills or factories (should be the same)
- The cotton mills were vacant and to let, the existing businesses having been ended and the process machinery removed ; and
- The possibility of making a minor alteration of a non-structural character
- The principle of rebus sic stantibus applied only to the physical characteristics
What is the Rating List
sets out all the Rateable Values for non domestic properties in England and Wales
Methods of Valuation
Comparable
Contractors
Profits (R&E)
Hierarchy of Judical System
First Tier Tribunal
Upper Tribunal
Court of Appeal
Supreme Court
Partially vacant buildings
Section 44a of the LGFA 1988
Allows for temporary exemption from rating of partly occupied buildings.
Discretion of the Local Authority
What is the LGFA 1988
Key legislation setting out the non domestic rating system
What is a hereditament
DRUGS Billing Authority:
- Single Rateable occupier
- In a billing authority
- Be capable of separate occupation
- Single geographical unit
- Single use
- Single definable position
Empty properties
Rating (Empty Properties) Act 2007
3 months empty rate relief
6 months for industrial
Was 6 weeks occupation now 13 weeks from 1 April 2024
Case law for intermittent occupation
Makro Properties Ltd v Nuneaton & Bedworth Borough Council
approx 0.2% of documents accounted for occupation in a warehouse
‘Sham tenancies’
Two local authorities
Rosendale & Wigan Council v Property Alliance Group (2019)
Companies set up as SPVs were then dissolved/ voluntary insolvency and therefore not liable for business rates
The Court of Appeal accepted this
Non Domestic Rating Act 2023
- Improvement Rate Relief - following qualifying improvement works’. 12 months relief. Applies from 1 April 2024
- Rate Relief - local billing authorities have the power to apply at their discretion a small business multiplier to ‘large hereditaments’ (by ignoring the rate supplement). Currently the supplement amounts to 1.3p for large assessments of £51,000 RV.
- Rating list duration will now be every 3 years
- Completion notices now expanded to allow for a notice to be served when RV is deleted for refurbishment works. Effective December 2023
- Access to VO Data regarding subject property
- Duty to Notify - must notify the VOA of any material changes within 60 days. In addition, an annual return confirming ‘no change’ or specifying any changes not notified.
- MCC - following COVID
- Matters affecting the ‘physical enjoyment’ of the hereditament 2.Matters ‘physically manifest within the locality’ as a result of:
Legislation
Advice or guidance from any public authority
Provisions under legislation
Anything done with a view to complying with any of the above.
RHL Relief
Qualifying connection
75% 21/22
50% 22/23
75% 23/24
75% 24/25
40% 25/26
£110k cash cap on group portfolio
Qualifying connection where both ratepayers are companies, and
i. one is a subsidiary of the other, or
ii. both are subsidiaries of the same company; or
Subsidy Control Act - £315k over 3 year period
The government will, in line with the eligibility criteria reimburse local authorities that use their discretionary relief powers under section 47 of the Local Government Finance Act 1988 (as amended) to grant relief
o2 - why should they not have been billed from the lease commencement?
Because the premises were incapable of beneficial occupation in accordance with Newbiggin v Sj and Monk
Jackson v Canary Wharf
How to calculate R&E
Section of the LGFA 1988
Section 7
