Local taxation/assessment - Level 3 Flashcards
When do you get small business rate relief?
You will not pay business rates on a rateable value of £12,000 or less.
What is the small business multiplier
49.9p
What is the standard multiplier for business rates
55.5p
If you’re a small business but do not qualify for small business rate relief what does your small business rate need to be less than
£51,000
What are business rates?
A national tax on the occupation of land and buildings collected locally
What are the four essential ingredients to determine rateable occupation?
Actual occupation or possession
Beneficial to the occupier
Exclusive to the occupier
the occupation must not be too Transient.
What is a hereditament?
A single unit of rateable property which will be shown as a separate entry in the rating list.
The General Rate Act 1967
What are the six rules to satisfy a hereditament?
Single rateable occupier
In a billing authority
Separate occupation
Single use
Single geographical unit
Single definable position
What is rateable value?
Annual rental value of a property on the AVD assuming a hypothetical tenancy based on seven assumptions.
What are the seven hypothetical assumptions?
Vacant
Available to let on annual tenancy
FRI terms
Reasonable repair
Tenant pays rates
Current use
No alterations
What reliefs are available?
SBRR
Transitional
Empty
Charitable
Retail, leisure and hospitality - 75% relief for the 2023 to 2024 tax year limited to £110,000 per business.
Rural - Population under 3000, only village shop/post office with RV under £8500 or only pub/petrol station with RV under £12500.
What legislation exists for Rating?
General Rate Act 1967
Local Government Finance Act 1988
Rating Valuation Act 1999
The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act
What RICS guidance exists for Rating?
Rating Consultancy Code of Practice 2017 - PS
Surveyors Acting as Expert Witnesses 4th Edition Feb 2023 - Practice Statement
Surveyors Acting as Advocates 2nd Edition 2017 - PS&GN
RICS Rating Appeals 4th Edition 2017 (Archived) - GN
What properties are exempt from business rates?
Domestic Property
Parks
Churches
Agricultural land
Lighthouses
Property used for the welfare of disabled people - training
What leading case law exists in relation to the repair assumption?
A
Monk Vs Newbigin 2017
The case concerned a large office block in Sunderland. On the relevant date for valuation, the rate payer was in the midst of redeveloping the property.
Supreme Court held that properties undergoing substantial renovation are to receive nominal rating values.
What do you know about Canary Wharf V Jackson 2019?
The case concerned two floors of a tower block (One Canada Square) at Canary Wharf, which had been stripped out in 2011 following a previous tenant vacating.
At the relevant date there were no contract of works for redevelopment or refurbishment and no evidence of constructive works taking place at the property on the relevant date.
Supreme Court held that premises which are not capable of beneficial occupation cannot represent a hereditament, and therefore should not be included in the rating list, other than by inclusion at a nominal rateable value “as an administrative convenience”.
What is the leading case law relating to merging hereditaments?
Woolway v Mazars 2015
Mazars LLP, a firm of accountants, occupied Floors 2 & 6 of Tower Bridge House
The VT decided that Mazars’ floors were functionally essential to one another and, as such, they should be assessed as one.
The Supreme Court determined that none of the floors within the building were contiguous with one another.
What was the outcome of Woolway V Mazars 2015?
The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act
Became law on 1 November 2018. The Act allows properties that are “contiguous”, and are in common occupation, to be treated as a single hereditament.
Allowed ratepayers whose hereditaments have been split (following Mazars ruling) to apply to the VOA to have hereditaments treated together.
How do you calculate business rates liability
Rateable Value x Multiplier (less any reliefs)
What guidance is there for rating surveyors?
RICS 5th edition of the Rating Consultancy Code of Practice 2024
VOA Agent Standards
Can you tell me some of the changes brought in by the Non-Domestic Rating Act 2023?
3 yearly revaluations rather than 5 yearly beginning 2026
information sharing - responsibility on ratepayers to provide information
improvement relief - new mandatory relief
completion notices on refurbished buildings can be served (as was already the case with new buildings to add them back to the rating list)
What is the effective date of the current list and what is the AVD
1 April 2023
1 April 2021
What do you mean by AVD and what is it?
Antecedent Valuation Date is the valuation date adopted for the 2023 rating list
Can you tell me what is meant by rateable value?
The RV is determined by the VOA and is 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 alteration may be made (only minor)
What is a hereditament?
A statutory definition does not occur but the General Rate Act 1967 describes a hereditament as property which is or may be liable to a rate and be shown as a separate item in the valuation list. A hereditament is land or property that must satisfy the following 6 rules: in a billing authority, single rateable occupier, be capable of separate occupation, single geographical unit, single use, single definable position.
What information do you include in a check submission?
Factual details - info to confirm floor areas, address, lease info relevant to non-valuation contentions such as a split, merger or floor area contention
What information do you include in a challenge submission
More detailed - include for comparable evidence for a valuation contention
Can you explain contiguity for me
Contiguity means some or all of a wall/means of enclosure must form part of a wall/enclosure the other.
This can include consecutive stories - Woolway v Mazars
Can you tell me what the different methods of valuation are and when you might use them?
Comparable method - properties where there is sufficient rental evidence to analyse on a rate psm
Receipts and expenditure method - trading premises (hotels pubs caravan parks)
Contractor’s basis - property which does not transact on the rental market (unusual i.e., factory)
What is transitional relief
Transitional relief limits how much your bill can change each year as a result of business rates revaluation.
From the 2023 to 2024 tax year you’ll get transitional relief if your rates go up or down by more than a certain amount. This means changes to your bill are phased in gradually.
Your council will adjust your bill automatically if you’re eligible.
What can you tell me about small business rates relief?
You can get small business rate relief if:
your property’s rateable value is less than £15,000
your business only uses one property - you may still be able to get relief if you use more
What can you tell me about retail, leisure and hospitality relief?
You could qualify for retail, hospitality and leisure relief if your business is mainly being used as a:
shop
restaurant, café, bar or pub
cinema or music venue
hospitality or leisure business - for example, a gym, a spa or a hotel
If you’re eligible, you could get 75% off your business rates bills for the 2024 to 2025 billing year (1 April 2024 to 31 March 2025).
The most you can get in relief each billing year is £110,000 per business.
What can you tell me about empty property relief?
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.
What properties can get extended empty property relief?
-Industrial premises (for example warehouses) are exempt for a further 3 months
-Listed buildings - until they’re reoccupied
-Buildings with a rateable value under £2,900 - until they’re reoccupied
-Properties owned by charities - only if the property’s next use will be mostly for charitable purposes
-Community amateur sports clubs buildings - only if the next use will be mostly as a sports club
What can you tell me about charitable relief?
You could get charitable rate relief if your property is mainly used for charitable purposes.
To be eligible, the property must be used by either:
- A charity, or the trustees of a charity
- A community amateur sports club (CASC)
Charitable rate relief gives you up to 80% off your business rates bill.
Your local council may also be able to top up the discount so that you do not have to pay business rates. This is called ‘discretionary relief’.
What can you tell me about Rural rate relief?
You could get rural rate relief if your business is in an eligible rural area with a population below 3,000. Your business must also be:
-The only village general store, food shop or post office, with a rateable value of up to £8,500
-The only public house or petrol station, with a rateable value of up to £12,500
If there’s more than one business in the area, both businesses can still apply if they are different types of business - for example, a public house and a food shop.
The property must be occupied.
What can you tell me about local newspaper relief?
You could get local newspaper relief if your property is used as office premises for journalists and reporters on a local newspaper.
You cannot get the relief for:
-Magazines
-Online newspapers that are not printed
The relief is a £1,500 reduction in business rates per year for eligible properties.
You can only get the relief for one property per newspaper even if more than one property is used as offices for the newspaper.
If several local newspapers use the same office, they can only get the relief on one newspaper title.
Can you tell me about CCA process and the different timescales?
If you were to represent your client at Valuation Tribunal, in what capacity would you be acting?
What is the Empty Rates Relief Case Law?
Monk Vs Newbigin 2017
