Local Taxation L3 Flashcards
What RICS guidance is there for rating practitioners?
RICS Rating Consultancy Code of Practice (5th Edition) 2024
RATING CONSULTANCY
What is the definition of Rateable Value?
And where can it be found?
Found in Schedule 6 para 2 of the Local Government and Finance Act 1988
RV is the amount of rent a non domestic property is estimated to achieve year to year based on 3 assumtions
1. RV is to be assessed at AVD
2. The hereditament is in reasonble repair unless deemed uneconmical to repair
3. The lease is FRI
What are the exemptions to rating?
Where can they be found?
Exemptions are schedule 5 of the Local Government and Finance Act 1988
4 main exemtions
1. Relgious
2. Agriciularal
3. Properties used for the welfare of those less abled
4. Parks and Recreational Grounds
What case law considers the invitation test?
1) INVITATION TEST - Broxtowe Borough Council V Birch
Case considered the difference between a certificate of relgious worship and a place of public worship - held that the building was not exempt due to lack of public notices and infomation availble
More Recent Case
2) Ricketts V Church of Scientology (2023)
Triubnal held the external appearance of the building citing ‘Church’ along with its online presence satified the test.
Relating to your level 3 example
What case law considers the invitation test?
Tell me about them
1) INVITATION TEST - Broxtowe Borough Council V Birch
Case considered the difference between a certificate of relgious worship and a place of public worship - held that the building was not exempt due to lack of public notices and infomation availble
1) Ricketts V Church of Scientology (2023)
Triubnal held the external appearance of the building citing ‘Church’ along with its online presence satified the test.
Relating to your level 3 example
What case law considers the invitation test and the extent to that ?
Tell me about them
1) INVITATION TEST - Broxtowe Borough Council V Birch
Case considered the difference between a certificate of relgious worship and a place of public worship - held that the building was not exempt due to lack of public notices and infomation availble
1) Ricketts V Church of Scientology (2023)
Triubnal held the external appearance of the building citing ‘Church’ along with its online presence satified the test.
3) TO THE EXTENT THAT - Henning v Church of Jesus Christ of Latter Day Saints
A Church in Surrey where members and public could not enter the Mormon temple unless they had been reccomended by the bishop, therefore the temple did not satisfy the inviation test. However meeting house which was used for congregational worship satisfied the test to the extent that.
4) This was also tested in Ghallaghar V Churuch of Jesus Christ of Latter Day Saints (Preston)
Relating to your level 3 example
What case law considers exemption to the extent that ?
Tell me about them
1) TO THE EXTENT THAT - Henning v Church of Jesus Christ of Latter Day Saints
A Church in Surrey where members and public could not enter the Mormon temple unless they had been reccomended by the bishop, therefore the temple did not satisfy the inviation test. However meeting house which was used for public relgious worship satisfied the test to the extent that.
2) This was also tested in Ghallaghar V Churuch of Jesus Christ of Latter Day Saints (Preston)
When is AVD and what is the current AVD?
AVD is 2 years prior to complied reval list
* Current 2023 list - 1st April 2021
* Last 2017 List - 1st April 2015
* Next 2026 List- 1st April 2024
Where is the primary legislation for local tax found?
Schedule 6 of the Local Government and Finance Act 1988
What is material day?
And what do we consider on the material day
Material Day is the day on which we consider the physical factors affecting the property and locality
There are 6 physical factors to take into account:
1. Matters affecting the physical enjoyment of the hereditament
2. The mode or category of occupation of the subject
3. The mode of category of occupation of surroudning properties
4. Factors affecting physical locality
5. Quantity of minerals extracted
6. Quantity of waste deposited
What is material day?
And what do we consider on the material day
Material Day is the day on which we consider the physical factors affecting the property and locality
There are 6 physical factors to take into account:
1. Matters affecting the physical enjoyment of the hereditament
2. The mode or category of occupation of the subject
3. The mode of category of occupation of surroudning properties
4. Factors affecting physical locality
5. Quantity of minerals extracted
6. Quantity of waste deposited
What is the effective day?
Effecitve date is the day which changes to rating list applies
What recent changes have there been imposed by the Non Domestic Rating Act 2023?
1) 5 year to 3 year revals
2) Buisiness rates multipliers have changed from CPI to RPI
- Small buiness 49.9p
- Large 54.6p from 51.2p
3) Imporvment Relief - to encourage occupiers to invest in their properties
What are reliefs are availble from business rate?
There are 4 main reliefs which can be applied by local authorities
1. Small Rate Relief > £12K RV and than stepped from £12-£15K RV
2. Empty Rates Relief - (3 months shops offices / 6 months industrials)
3. Charitable Relief
3. Enterprise Zone Relief
S E C E
What is rateable occupation?
refer to case law
Rateable occupation must satisfy 4 tenants which are derived from John Liang & Sons v Kingswood [1948]
There must be:
1. Actual Occupation - Physically present
2. Benefitial Occupation - Benefit to occupier
3. Exclusive Occupation - One Rateable occupier (paramount)
4. Not Too Transient - Degree of permanence
Case Law relates to Air Ministry Runway Hanger
ABET
What is a hereditament?
refer to case law
A hereditament is an entry to the rating list which satifies 4 rules from Woolway (VO) v Mazzars [2015]
1. Definable Position
2. Single Occupation
3. Single Use
4. Single Geographical Location
U shaped Office, occupied 2nd and 6th floor Supreme court = Seperated
Property In Common Occupation Bill 2018 did a U turn on supreme court decsion (Seperate but adjoining used in common occupation can be classed as a single hereditament) (Rating & Council Tax Act 2018)
What is the Rating Manual?
The VOA’s technical manual for NDR rating
How do you weight evidence for rating?
Refer to case law
Consider the hierarchy of evidence from Lotus & Delta v Culverwell [1976] - Shoe shop Leicester
1. Start with the subject rent if available
2. Consider how much weight to attach to subject rent based on how close it is to AVD, repair, condition etc
3. Consider rents of similar properties within the locality
4. Conisder rating assessments of comparable properties
5. Form an opinion of value in light of all the evidence considered
6. Where there are no comparable rents it would be more difficult to reject the subject rent
Which case considered timing of evidence in regards to AVD?
Specialeyes v Felgate (Determined post AVD rent can be considered)
* Row of shops rents were agreed with one surveyors firm representing most tenants therefore less weight was attached
* Considered post AVD rents between 1986-1987 as this was helpful in showing an upwards trend but attached less weight
What case relates to repair?
Tell me a little about this case
-
Princess Street v Bond [2002]
Considered local market prospect when considering if economically viable to repair -
Newbigin (VO) v Monk [2017]
VO contested that a property in an uneconomic state of repair should be rated as zero rated as shown per schedule 6 of LGFA 1988 assumptions for Ratebale Value. However it was found that this assumption did not consider items that have been removed and therefore this can be considered unable of beneficial occupation, in this case the property must be removed from the rating list -
Jackson v Canary Wharf [2019]
Taking redevelopment out if the list if not capable benefiital occupation, schedule of works and a completion notice.
Relating to an office in canary wharf where the market has expectations for beneficial occupation
What is Rebus Sic Stantibus?
What case law relates?
Means as things stand
* There is phyical limb & use limb
1. Physical limb - Must be valued in actual state and only minor alterations can be invisioned by incoming tenant
2. Use limb - Must be valued in its current use or category of use
Scottish & Newcastle v Williams - Wine bar in shopping centre (valued as shop)
Fir Mils test - shop is a shop but not any kind of shop
What regulations cover CCA?
Non-Domestic Rating (Appeals and Alterations) Regulations 2009 as amended in 2017 which introduced CCA
What is check and what are the time restrictions?
Ensures factual matters are valued and agreed as far possible
* VOA has 12 months to complete a check
* Ratepayers have 4 months to challenge from Decision notice
What is challenge, how does it work and what are the time restrictions?
Challenge allows ratepayers to dispute valuation matters
There are 12 grounds that can be appealed such as compiled list errors, reconsistutions, wrong RV, deletion, wrong description
- VOA have 18 months to respond
- Ratepayers have 4 months to appeal
Proposal must include name, address, contact details, grounds of challenge, evidence, reasoning, proposed RV, effective date and proposal date
What is an appeal and what are the time restrictions?
What guidance can you refer to?
Allows ratepayers to appeal to VTE
* VOA has 2 weeks to comply with order
* Small rate payers pay £150, otherwise £300
* Returned if list is altered
* No fee if VOA missed the 18 month deadline
Refer to VTE Consolidated Practice Statement 2024
VTE Regulations 2009
Valuation Tribunal England (VTE) Consolidated Practice Statement 2024
Outlines all the provisions
What did you do at VT?
I presented factual matters objectivily with a duty to the VT under my expert witness obligations
I presented a summerisations of matter in line with a duty my client under my advocate obligations
What is Valuation Tribunal England?
VTE is an inderpendant judicial body that provide valuation dispute resolution governed by the VTE Regulations 2009
What RICS guidance is there for Valuation Tribunal?
RICS Practice Statement Surveyors Acting as Expert Witness 2023
RICS Practice Statement Surveyors Acting as Advocate 2017
What are the stutory decap rates?
How are they set?
For schools, hospitals and defence its 2.6%
For everything else its 4.4%
The lower decap rate is related to the associated cost of borrowing being lower for those types of properties
Do Uniform Business Rates (UBR) Ever Differ?
UBR UNIFORM BUSINESS RATES
Yes, they differ in London, Wales and Scoltland
Buisiness rates multipliers have changed from CPI to RPI
- Small buiness 49.9p
- Large 54.6p (from 51.2p)
What is a Transitional Relief Certificate?
Transitional relief is scheme that reduces the immediate impact of large increases in Revaluations, it staggers the increased tax liablity.
What are the types (categories) of Plant & Machinery?
There are 4 categories
1. Power
2. Services
3. Transport
4. Structure
Where is the P&M Regulations found?
Plant and Machinary Regulation 2000
What are the key pieces of legislation for Rating?
- Local Government Finance Act 1988
- Non-Domestic Rating (Appeals and Alterations) Regulations 2009 as amended in 2017 which introduced CCA
- Rating & Council Tax Act 2018 (PICO)
- Non Domestic Rating Act 2023
What is an MCC?
Is changes to the physical factors on the material day listed in schedule 6 of LGFA 1988
What is a Hypothetical tenancy as defined in the Rating (Valuation) Act 1999?
The rateable value is a notional annual rental value expected if the property were vacant and to let on the open market based on 3 assumptons.
You mentioned Air Con where do you find the regulation for P&M?
The Non-Domestic Rating (Plant and Machinery Regulation) Regulations 2000
What class is Air Con as mentioned in your inspection L3 example?
Class 2
What are the 4 classes of P&M?
- POWER
- SERVICES
- MOVEMENT
- STRUCTURE
