Local Taxation Level 1

Question 1

Definition of RV

Answer 1

The rateable value of a non domestic hereditament none of which consists of domestic property and none of which is exempt from local non domestic rating shall be taken to be an amount equal to the rent it is expected to be reasonably let at year to year on 3 assumptions:

1. Tenancy begins on the day by reference to which the determination is to be made
2. Immediately before the tenancy begins it is in a reasonable state of repair, excluding any repairs which might be uneconomic
3. Tenant liable for all rates, taxes, insuring and repairs.

Question 2

What are the 4 tenets of rateability?

Answer 2

Laing v Kingswood 1949
Actual - tangible
Beneficial - occupancy has some benefit to occupier
Exclusive - paramount occupation. 1 use.
Transience - degree of permanency

Question 3

What is the definition of hereditament?

Answer 3

S115 General rates act 1967
Hereditament is a property liable for rates
Shown as separate item in rating list

Question 4

What is Woolway v Mazars 2015

Answer 4

Re-looks at the unit of assessment.
Established that contiguity is not enough. Must have intercommunication.
Firm occupied two different floors. No intercommunication.
They were not functionally essential to one another. Could be separately let.
Functional test - if two parcels of land are distinct, they could be assessed as one if they are necessary for effectual enjoyment.

Question 5

What is PICO?

Answer 5

The rating (Property in common occupation) and council tax (empty dwellings) act 2018. 
Reverse part of Mazars to allow properties which are contigous but not intercommunicating. Allowed a small window for appeals to be put in.

Question 6

What reliefs are available in NDR?

Answer 6

Small business rates relief - 100% relief for RVs £12,000 or less.
£12,000-£15,000 is sliding scale.
£51,000 or less = small biz rates multiplier. 49.1p.
Then it’s standard rate multiplier of 50.4p.
Might be different in london.
Charity shops = upto 80% relief
Empty rates relief = 3 months relief and 6 months for industrials
Exempted buildings = ag land & buildings, fish farms, buildings used for training or welfare of disabled peoples, public places of worship

Question 7

What section of act deals with exemptions from rating

Answer 7

Sch 5. Invitation test for religious places of worship. Ag land must be human consumption.
Parks are exempt.

Question 8

Case law for paramount control?

Answer 8

Southern Railways case 1967.
WHS occupied space in Victoria station. Station could lock doors when it wanted. WHS smith found to be in paramount control.

Question 9

Agricultural exemptions

Answer 9

Sch 5. Arable, meadow, pasture. 0.10 ha or larger for poultry farming. Land used for plantation or wood.
Does not include: occupied with house. Gardens. Racecourses.
Ag buildings must be occupied with ag land.

Question 10

Religious place of worship exemptions

Answer 10

Public religious places of worship or buildings used in connection for organising these worships. The invitation test - Church of jesus christ and latter day saints v Hennings 1963 - General public not allowed except by membership. It was held rateable.

Question 11

When can properties be merged?

Answer 11

Properties can be merged if they satisfy the contiguity test in Section 64 of the LGFA. Amendments by PICO.

Question 12

When can a property be deleted from a list?

Answer 12

Uneconomic repair.
Undergoing redevelopment. Incapable of beneficial occupation.
If brought in without completion notice as per Section 46a / Sch 4.

Question 13

What is effective date and material day

Answer 13

Effective date is when rates liability start. Material day is when the mentioned matters in Schedule 6 para 2(7) are taken into account. Physical matters.

Question 14

What is an MCC

Answer 14

A material change in circumstance has affected the value of the hereditament. Material day is date of check.

Question 15

What is Rebus Sic Stantibus?

Answer 15

Taking things as it stands.
Two limbs: Mode or category of occupation and physical limb. Only minor changes envisaged.

Key case - City duck or scottish newcastle 2000. Public house amongst shops was held in a separate mode or category. Should be valued as such and not a shop.

Firmill v Royton - a shop is a shop.

Question 16

Timelines of CCA

Answer 16

Check - VO 12 months to complete. Factual matters.
Challenge - 4 months to submit. VO 18 months to resolve.
Appeal - 4 months to appeal
16 months to submit MCC proposal.

Question 17

What is uneconomic repair?

Answer 17

These are repairs which a landlord would find uneconomic. Denly case which provided a rule of thumb of 5x the RV. However, valuer must have regard to type of property and location. What would be the RV if in repair?

Question 18

What is monk v newbigin 2015?

Answer 18

Deals with uneconomic disrepair. Monk freehold owner of first floor office. Entered into building contract to renovate to replace tenants. Monk wanted VO to reduce rates to £1. VO said no. SC said for buildings under going redevelopment, there is no basis to apply the repair assumption if they are incapable of beneficial occupation.

Question 19

What is tone of the list case law

Answer 19

Generally accepted level of value

Obrien v Harwood 2003 - 15 settlements which established the tone.

Question 20

What are transitional reliefs

Answer 20

They limit how much your bill can go up or down by each year as a result of Revaluation.

Phased in gradually.

Reg 17 if RV 31 Mar 2017 is wrong
Reg 16 If RV 01 Apr 2017 is wrong
Refer back to rating manual

Question 21

What do you know about iceland v berry 2018

Answer 21

SC case. Iceland is a well known supermarket selling frozen goods. Question to the court was whether the Air handling system is part of the manufacturing or trade processes. If they are then they are to be ignored. Usuallly it is rateable as it provides services to the hereditament but is it excluded in this case by the regulations 2000 themselves which state it is ignored for manufacturing or trade processes. Decision was that the AHS is used to keep goods in frozen manner. It is part of trade process.

Question 22

What is a composite hereditament?

Answer 22

A property which has both domestic and non domestic elements.

Question 23

Where is definition of composite found?

Answer 23

Section 64 of LGFA.

Question 24

Where is definition of domestic property found?

Answer 24

Section 66 - if it is used wholly for the purposes of living accomodation

Question 25

What is the test to decide if something is domestic or not?

Answer 25

‘Use’ test. definition clearly mentions use.

Question 26

How do you value composities?

Answer 26

Based on a notional usage. Establish normal pattern of occupation of shops in a locality as it can vary. Then RV is the amount attributable to the non domestic section.

Question 27

Defintion of RV of composite hereditaments

Answer 27

Schedule 6 para 2(1a)

Question 28

What section of the Act talks about empty rates?

Answer 28

Section 45.

Question 29

Who gets extended empty rates relief?

Answer 29

Industrials for further 3 months (total 6)
Listed buildings till they are reoccupied
Buildings with RV less than £2,900 - till reoccupation
Properties owned by charities if next use is also charity

Question 30

what do you know about rates retention and devolution?

Answer 30

Councils keep 50% of rates. plans to increase this to 100%.

Question 31

What is covid business rates relief?

Answer 31

Retail properties got 100% relief from 2020-2021 tax year. It was extended for 3 months till july 2021 then relief became 66% until marchh 2022.

Question 32

Is Covid an MCC?

Answer 32

Bill passed to say Covid not an MCC.

Question 33

UKI Kingsway Ltd v Westminster City Council case

Answer 33

Council served completion notice on reception and addressed it as ‘owner’. Appellant argued it was invalidly served. SC said it was fine. They followed the completion notice procedures in Section 46 and Schedule 4a reasonably.

Question 34

Ludgate house case…

Answer 34

Revolves around guardianship scheme to mitigate rates.
CoA found that Ludgate house was in general control of the building by virture of legal agreements.
Guardians were hired to keep away squatters. Ludgate house said this is no longer non domestic so delete it.

It is found to be NDR composite as partial composite.

Question 35

The Horizon, Leicester VT decision 2019

Answer 35

Gives more info on what is new building. Atrium significantly altered which constituted as new building so CN could be served on that. It did not regard the whole building as new though. Just that one floor.