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Local Taxation & Assessment > Local Taxation & Assessment > Flashcards

Local Taxation & Assessment Flashcards

1
Q

What is the current uniform business rate for 2021/22 for RV’s less than £51,000?

A

£0.499

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2
Q

What is the current uniform business rate for 2021/22 for RV’s over £51,000?

A

£0.512

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3
Q

What is the rates supplement for Greater London?

A

£0.02 crossrail supplement for properties over £70,000. Total poundage is £0.532

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4
Q

What is the rates supplement for the city of London?

A

£0.008 to all city of London property provide additional support with police and security

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5
Q

What is the current AVD

A

1st April 2015

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6
Q

What is the current effective date of the rating list?

A

1st April 2017

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7
Q

When is the next re-valuation and what will the AVD be?

A

AVD will be the 1st April 2021 with the effective date being 1st April 2023

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8
Q

What index is used to update the business rate multiplier?

A

Consumer Price Index CPI

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9
Q

What are the four essential factors for rateable occupation?

A

Beneficial Occupation
Exclusive Occupation
Actual Occupation
Permanence

BEAP

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10
Q

What is the definition of a Hereditament?

A

A property which is or may become liable to a rate

Defined in General Rates Act 1967

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11
Q

To be a rateable hereditament a property must satisfy what 6 rules? and what case law sets this out?

A

Gilbert Vs Hickinbottom 1956

  1. Single rateable occupier
  2. In a billing authority
  3. Be capable of separate occupation
  4. Sing geographical unit
  5. Single use
  6. Single definable position
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12
Q

Who sets the RV?

A

VOA which is part of HMRC

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13
Q

The RV can be defined as?

A

The annual rental value of a property on the AVD assuming a hypothetical tenancy based on a 7 assumption.

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14
Q

What are the 7 hypothetical assumption for a tenancy in relation to an RV?

A
  1. Vacant
  2. Available to let on an annual tenancy
  3. FRI terms
  4. In good repair
  5. Tenant pays rates
  6. Current use
  7. No alterations may be made
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15
Q

The rating list is a _____ document

A

Statutory

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16
Q

What are the 3 methods of valuation for business rates?

A
  1. Comparable
  2. Contractors
  3. Profits
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17
Q

What is transitional relief?

A

Transitional relief limits how much your bill can change each year as a result of revaluation.

This means changes to your bill are phased in gradually, if you’re eligible.

You get transitional relief if your Property is in England
rates go up or down by more than a certain amount

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18
Q

Are there different groups in transitional relief?

A

Yes,

Small up to £20,000

Medium £20,001 to £99,999

Large £100,000 +

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19
Q

What did the RICS publish for guidance to surveyors undertaking rating work?

A

Rating Consultancy, Code of Practise 4th Edition 2017

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20
Q

What is a completion notice?

A

A notice the VOA can serve to an owner of a newly constructed property to prevent the party avoiding the payment of rates by not completing the construction of the building

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21
Q

What does the completion notice specify?

A

A proposed completion day when the building is deemed to be completed.

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22
Q

Is there a right to appeal a completion notice?

A

Yes

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23
Q

What did the RICS publish to assist surveyors with rating appeals?

A

RICS Rates Appeal Guidance Note, 2017

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24
Q

What does CCA stand for?

A

Check Challenge Appeal

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25
Q

Who initially hears appeals?

A

Valuation tribunal

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26
Q

How many local tribunals are there?

A

56

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27
Q

How far can appeals proceed to?

A

Upper Tribunal (Lands Chamber) and House of Lords

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28
Q

What acts governs empty property tax?

A

Rating (Empty Properties) Act 2007

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29
Q

What is the empty property rate?

A

100% of rates payable

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30
Q

How long does empty relief apply for for Offices, Shops (including pubs and restaurants)?

A

3 months

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31
Q

How long does empty relief apply for for warehouses and industrial units?

A

6 months

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32
Q

How may weeks of occupation does it take for a property to re-qualify for empty rates relief?

A

6 weeks

33
Q

What was the retail relief scheme?

A

Originally 33% off the bill for eligible retail and leisure properties under £51,000 RV. For 2019. Was due to rise to 50% off, but never implemented due to Covid-19 relief.

34
Q

When would a property be exempt from business rates?

A
  1. Vacant listed buildings
  2. Charities
  3. Properties prohibited by law to be occupied - demolition order
  4. RV less than £2,900
  5. Properties held by companies in administration and in receivership.
  6. Community amateur clubs
35
Q

What anti-avoidance measures are in place?

A
  1. VOA can disregard the changed state of a property when assessing RV if the owner damaged the property as an attempt to stop paying rates. But must be capable of beneficial occupation.
36
Q

What does the case law Makro Properties Ltd v Nuneaton & Bedworth Borough Council (2012) stand for?

A

Occupier put a pallet of documents in a warehouse which took up 0.2% of the floor space. Occupation was for over 6 weeks, was deemed at the high court that the property did qualify for empty rates once the pallet was removed.

37
Q

What does the case law Woolway v Mazars (2015) stand for?

A

States that were floors which are linked only by common areas are functionally essential they should be rated as one hereditament not two. The rule of thumb here being that one larger property would produce a lower RV than the two combined due to quantum and fragmentation allowances.

38
Q

What is the Material Day

A

The Material Day is the day on which certain considerations are taken into account for valuation purposes when thinking about making an alteration to a list. This is the same whether the alteration results from a proposal or by a valuation officer notice.

39
Q

Small Business Rates relief, 100% relief for properties with a RV of up to ???

A

£12,000

40
Q

Small Business Rates Relief, properties between £12,000 and £15,000 qualify for what?

A

Tapered relief between 100% and 0%

41
Q

The CPI is usually used to increase the multiplier annually, what is the CPI?

A

A consumer price index measures changes in the price level of a weighted average market basket of consumer goods and services purchased by households. A CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.

42
Q

What case law sets out the definition for Rateable Occupation of a Hereditament?

A

J Laing & Son V Kingswood AC (1949)

43
Q

What are the 6 propositions to have regard to when analyzing rental evidence? The originated from Lotus & Delta Ltd v Culverwell (VO) and Leicester City Council (1976).

A
  1. Where the hereditament which is the subject of consideration is actually let that rent should be taken as a starting point.
  2. The more closely the circumstances under which the rent is agreed both as to time, subject matter and conditions relate to the statutory requirements contained in the definition of gross value in section 19 (6) of the General Rate Act 1967 the more weight should be attached to it.
  3. Where rents of similar properties are available they too are properly to be looked at through the eye of the valuer in order to confirm or otherwise the level of value indicated by the actual rent of the subject hereditament.
  4. Assessments of other comparable properties are also relevant. When a valuation list is prepared these assessments are to be taken as indicating comparative values as estimated by the Valuation Officer. In subsequent proceedings on that list therefore they can properly be referred to as giving some indication of that opinion.
  5. In the light of all the evidence an opinion can then be formed of the value of the appeal hereditament, the weight to be attributed to the different types of evidence depending on the one hand on the nature of the actual rent and, on the other hand, on the degree of comparability found in other properties.
  6. In those cases 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.
44
Q

What does the case law Wallshire v Aarons (1989) set out?

A

Why rent reviews are second best to open market lettings. Because rent reviews are negotiated between valuers, because although their aim is to achieve the same end-result of deciding what the market rent is, their decision is not tested by the market; their decision, their agreement, is based on their conclusions about what the market would decide. Negotiated settlements therefore can be unreliable because of the possibility of error piled on error.

45
Q

What are the tests for a Material Change?

A

(i) Does the matter concern a characteristic of the premises or of the locality, or is it something to do with the actual occupier or the way in which it conducts its business? A relevant change will concern the premises not the way the actual occupier conducts its business. For changes to the locality, see (iii) below.
(ii) Does the matter concern a characteristic of the premises? If so, does it affect the physical state of the premises or the mode of its occupation ? A relevant change will affect the physical state of the premises or how it is occupied.
(iii) If the matter does not concern a characteristic of the premises, does it concern a characteristic of the locality in which the premises are situated? If so, does the matter affect the physical state of the locality or use or occupation of other premises in the locality? If both answers are “yes”, the change is relevant.
(iv) If the matter concerns a characteristic of the locality, but does not affect the physical state of the locality or concern the use or occupation of other local premises, is the matter itself physically manifest in the locality? If the answer is “yes”, the change is relevant.

46
Q

How are pubs rated by the VOA

A

my experience has not covered dealing with the rating assessment of pubs, but I understand that the method of valuation is R&E and that the VOA employ a short cut method and the factors that are considered are licensing hours, throughput of drinks, whether food is offered, entertainment areas etc

47
Q

What does R & E Method stand for?

A

Receipts and Expenditures

48
Q

Who Qualifies for Business Rates Retail Relief?

A

shop
restaurant, café, bar or pub
cinema or music venue
hospitality or leisure business - for example, a gym, a spa, a casino or a hotel

49
Q

From July 2021 what discount will apply to eligible retail property?

A

66% off your business rates bills for the rest of the 2021 to 2022 tax year (1 July 2021 to 31 March 2022) - up to a total value of £2 million

50
Q

Are there any conditions and caps for the new retail relief post July 2021?

A

If your business was legally allowed to open during the national lockdown starting 5 January 2021, your discount for 1 July 2021 to 31 March 2022 will be capped at £105,000 rather than £2 million.

51
Q

What is a current popular appeal reason?

A

material change in circumstances (MCC) due to Covid-19

52
Q

What have the VOA said in reply to these Covid MCC claims?

A

The government has said it will rule out appeals for business rates revaluations due to Covid-19, and instead work with councils to distribute a new £1.5bn rates relief fund to sectors excluded from existing arrangements.

53
Q

What help has the Government given the leisure sector?

A

Eat Out to Help Out Scheme

Reduced VAT rate

business rates holiday for 2020/21 (extended to 30 June 2021) and relief

A series of small business grants.

54
Q

What are the steps to your rating case in Holborn?

A
  1. Check TOE & Retainer
  2. Identify disparity between RV & Rent
  3. RR date Jan 2015
  4. Informed client
  5. Inspect, NIA measure
  6. Checked for comps - Limited
  7. Applied Lotus v Culverwell
  8. Check
  9. Challenge document with Val at £500 psm (current 700psm)
  10. Submitted Challenge
  11. 10 months later Accepted as well-founded
  12. List altered
  13. Informed client of savings
  14. Invoiced client
  15. Evidence pro-forma
55
Q

Name some business rates relief schemes?

A

Retail relief
Transitional relief
Exempted buildings and empty buildings
Charitable Rate Relief

56
Q

Where does the statutory definition of the RV come from?

A

Local Government Finance Act 1988

57
Q

What is the statutory definition of the RV in the Local Gov Finance Act 1988

A

Non-domestic property
Amount equal to rent annually
FRI
Tenant pays rates

58
Q

What act amended the statutory definition of an RV?

A

Rating (Valuation) Act 1999

59
Q

What is the updated definition of an RV under the Rating (valuation) Act 1999?

A

Annual rent at AVD under the following assumptions:

  1. Vacant
  2. Available to let on an annual tenancy
  3. FRI terms
  4. In good repair
  5. Tenant pays rates
  6. Current use
  7. No alterations may be made
60
Q

What else did you recommend to your client of the perry hill in regards to relief?

A

That they apply for the retail relief scheme for 33% as their RV was less than £51,000.

They also confirmed they did not exceed the 200,000 euro state aid limit.

61
Q

What is the purpose of RICS Rating Consultancy Code of Practise 4th Edition?

A

The aim of improving consumer protection and maintaining professional standards,

62
Q

What does the RICS Rating Consultancy Code of Practise 4th Edition say in relation to seeking instruction?

A

Can approach rate payers even if they have representation.

But must not repeatedly contact them if they have indicated they are happy with their service or do not want help.

Must only contact the VOA with permission from ate payer.

63
Q

What does the RICS Rating Consultancy Code of Practise 4th Edition say in relation to Marketing?

A

Must be done in professional manner.

Must be truthful and manager expectations of rate payers by not overpromising with misleading statements.

No slate other firms or claim to have higher success.

64
Q

What does the RICS Rating Consultancy Code of Practise 4th Edition say in relation to HOT’s?

A

Sets some standard TOE similar to VPS 3

65
Q

What is the General rates 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 statutes from the Poor Relief Act 1601 to the Local Government Act 1966

66
Q

What was the outcome of Mazars vs Woolway?

A

What was the ‘staircase tax’?
The ‘staircase tax’ comes from a 2015 Supreme Court case, Woolway v Mazars, which decided that separate units that are not interconnected and are only accessible by passing over land owned by a third party should generally be assessed separately for business rates.

This meant that a business could be hit with separate rates bills for each floor of a building occupied by it, even where those floors were consecutive floors in a building.

If (as is often the case) access between the floors was via a common stairway owned by the landlord, then separate assessments would apply.

67
Q

What did The Rating (Properties in Common Occupation) and Council Tax (Empty Dwellings) Act 2018 or PICO

A

Reversed this Court decision on 1st November 2018

In summary, one rating assessment will generally now be applied to neighbouring floors or units occupied same business, so long as:

they are “contiguous”; and

they are not used for wholly different purposes.

68
Q

How long do the VOA have to reply to a check

A

They aim for 12 weeks but have 12 months.

69
Q

What happens if you can not agree with the VOA

A

The appeal is reffered to the Valuation Tribunal

70
Q

Who will the Valuation Tribunal be made up of

A

3 members including a chairman and assisted by a clerk.

71
Q

Are offers made to the VOA previously allowed to be shown to the tribunal by the other side?

A

No, they are without prejudice

72
Q

What does a surveyor act as at the valuation tribunal?

A

Expert Witness or Advocate. If advocate must state clearly and express clearly when acting as one or the other.

73
Q

Does your fee basis need to change if taken to a valuation tribunal?

A

Yes, can not be performance-based.

74
Q

Does the Valuation Tribunal award costs?

A

No

75
Q

R&E, ideally what information would you have?

A

3 years audited accounts

76
Q

What is the basic calculation for R&E ?

A 
Basic Calculation:
Receipts
Less
Expenditure
=Divisible Balance
Less
Tenant’s Share
=Rent
77
Q

What is the rule of thumb for tenants share/profit margin

A

The greater the competition for the property, the higher the rent and the lower the tenant’s share/profit margin

78
Q

What are the 5 steps of the contractor’s method of valuation?

A
  1. Estimate construction cost
  2. Adjust cost for deficiencies such as obsolescence and poor layout
  3. Add the estimated land value
  4. Apply the appropriate decapitalisation rate
  5. Stand back and look
79
Q

What happens if you dont pay rates?

A

Reminder
Final Reminder
Court summons to Magistrates’ Court

Local Taxation & Assessment (2 decks)

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